Plurilock Next Gen Cybersecurity
Trending >

Bellus Health has a 47 per cent upside, Mackie Research says

Bellus Health
Roberto Bellini President and Chief Executive Officer of Bellus Health.

Bellus Health (Bellus Health Stock Quote, Chart TSX:BLU) is all cashed-up to start a Phase II trial of its chronic cough drug, one which analyst André Uddin of Mackie Research calls a potentially best in class opportunity to target a multi-billion dollar market.

Yesterday, clinical-stage drug company Bellus Health announced that it had closed on a $35 million equity financing round at $0.95 per share (36.8 million shares), which the company will put towards a Phase II study of its chronic cough drug BLU-5937, said to commence by mid-2019 with results available by mid-2020.

Uddin says that Bellus could be presented with a decent monetization opportunity after the Phase II trial.

“We believe the Phase I data of BLU- 5937, together with the potential success of the Phase II study, should help Bellus forge a licensing deal for this candidate (Bellus could also be acquired),” Uddin says in a client update on Tuesday. “To be conservative, we have assumed Bellus would out-license BLU-5937 in 2020 (post Phase II) for an upfront of C$150 million and contingent milestones of C$450 million, as well as a royalty of 20 per cent in upfront.”

For comparison, Uddin points to Merck’s 2016 acquisition of Afferent Pharmaceuticals for its clinical trial stage cough drug MK-7264, which Merck paid US$500M upfront.

Uddin’s estimates have BLU generating revenue in 2020, 2021 and 2022 of $3.8 million, $7.5 million and $82.5 million, respectively.

The analyst has reiterated his “Speculative Buy” rating but has reduced his target price from $2.20 to $1.90 due to share dilution. The $1.90 target represents a projected return of 47 per cent at the time of publication.

  •  
  •  
  •  

About The Author /

Jayson is a writer, researcher and educator with a PhD in political philosophy from the University of Ottawa. His interests range from bioethics and innovations in the health sciences to governance, social justice and the history of ideas.

Comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Cantech Alerts.

Timely picks from Canada's best analysts. 

F                                                                      
close-link