Medexus Pharmaceuticals has a 149 per cent upside, Mackie Research says

Specialty pharma company Medexus Pharmaceuticals (Medexus Pharmaceuticals Stock Quote, Chart TSXV:MDP) has announced a deal for the Canadian marketing rights for Gliolan, a product used in the surgical removal of malignant brain tumours.

Mackie Research analyst André Uddin says the addition could result in sales of between $5 and $6 million for the company.

On Monday, Montreal-based Medexus (formerly Pediapharm Inc) announced that it has entered into a licensing agreement with German company photonamic GmbH & Co. KG for the exclusive rights to market and distribute Gliolan in Canada, a product which aids neurosurgeons by causing tumours to become fluorescent and glow. Already approved in several countries, Gliolan has been approved by the US FDA under the name Gleolan.

“This expanded, long-term exclusive agreement now provides us the opportunity to supply Gliolan in Canada, which we believe has the potential to improve patient survival,” stated Ken d’Entremont, CEO of Medexus, in a press release. “We expect Gliolan will be a tremendous asset for clinicians in addressing their significant medical need for enhanced tumor visualization during surgery.”

Uddin says he expects Medexus will file a marketing application to Health Canada for Gliolan in 2019 with a full launch of Gliolan in Canada expected in 2020.

“Gliolan is currently generating revenues of $30,000-40,000 per month. This product could generate peak Canadian sales of $5-6 million per year under a full launch. Our sales estimates of Gliolan for fiscal year 2020-2023 are: $0.4 million, $1.0 million, $2.0 million and $3.0 million, respectively. We are keeping our fiscal year 2020-2023 total revenue estimates intact, as we lowered some of our OTC revenues,” Uddin said in a client update Monday.

Uddin forecasts Medexus’ 2019 revenue and Adjusted EBITDA as $33.8 million and $2.3 million, respectively. He is maintaining his “Buy” rating and $10.50 target price, which represents a projected return of 149 per cent at the time of publication.