On Tuesday, the analyst reiterated his “Speculative Buy” rating with the new target of $0.50 (previously $0.70).
PMT posted its financials for the three and six month periods ended June 30, 2018, with a net loss for Q2 of $2.2 million on revenue of $0.0. The company ended the quarter with $6.8 million in cash and zero debt on its balance sheet.
Uddin says the financials are less important at this time than is the progress with getting its potentially best-in-class Alzheimer drug, PMN310, into clinical trials. The analyst compares Promis’ work on PMN310 with Biogen’s current research on the antibody aducanumab.
“PMN310 and aducanumab have a similar mechanism (targeting toxic Aβ oligomers) to treat Alzheimer’s, but PMN310 should have better safety,” says Uddin in a client update. “Potential positive results of the aducanumab Phase III studies and PMN310 Phase I study should further justify the science behind PMN310. For these reasons, we believe it is more reasonable to push out our assumed timing of a PMN310 licensing deal to 2020, as well as, to increase the deal size to $700 million. We previously assumed the company would out-license PMN310 in 2019 for $550 million.”
Uddin’s two-stage probability-adjusted DCF valuation results in his $0.50 target, which represents a 12-month projected return of 79 per cent at the time of publication.
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