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Tetra Bio-Pharma acquisition of Panag Pharma gets thumbs up at Paradigm

Tetra Bio-Pharma 2020

A new acquisition for Tetra Bio-Pharma (Tetra Bio-Pharma Stock Quote, Chart: TSX:TBP) turns the company into a vertically integrated pharma company, says Paradigm Capital analyst Rahul Sarugaser.

This morning, TBP announced it had reached an agreement to acquire Panag Pharma Inc. for $12-million, plus potential milestone payments.

“We are very pleased to announce this news to our shareholders, Tetra CEO Dr. Guy Chamberland said. “We have been working with Panag for over a year and as a combined entity we will have a robust product pipeline of cannabinoid derived drugs for development as prescription or OTC drugs. Tetra is not just acquiring assets and intellectual property, we are joining a group of world-renowned cannabinoid experts that will help take Tetra to the next level as a pharmaceutical company.”

Saraguser says this changes the profile of TBP from cannabis company with pharma interests to a true biopharma stock.

“As a biopharmaceutical company with broadening upstream strength in drug discovery and early-stage clinical development, TBP is evolving into a fully integrated biopharmaceutical company with an alluring pipeline for larger Pharma companies seeking new assets,” The analyst says. “TBP’s rigorous and skillful navigation of international regulatory architectures is a signal that it is, indeed, a biopharmaceutical company developing cannabis drug products, and not the other way around. TBP is a Q4 Top Pick that we see as the next GWPH.”

In a research update to clients today, Saraguser maintained his “Buy” rating and one-year price target of $1.75 on Tetra Bio-Pharma, implying a return of 62 per cent at the time of publication, including dividend.

Saraguser thinks TBP will generate Adjusted EBITDA of negative $2.0-million on revenue of zero in fiscal 2018.

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About The Author /

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.

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