Following the release of the company’s 2018 fiscal results, Paradigm Capital analyst Rahul Sarugaser is still betting on Tetra Bio-Pharma (Tetra Bio-Pharma Stock Quote, Chart TSXV:TBP) despite the company’s burn rate.
In mid-March, TBP reported its fiscal 2018 results. The company reported a net loss of $7.85-million on revenue of $112,320 versus revenue of zero and a net loss of $6.69-million in fiscal 2017.
The company ended the year with a cash position of $13.5-million, which the analyst notes means the company has just over a year of runway left. That, however, isn’t bothering Sarugaser a bit.
“While the six-month delay in TBP’s PPP001 clinical program was unfortunate, TBP—in true Pharma fashion—is built to manage such challenges during the drug development process,” he says. “Leaning on its deep pipeline of cannabinoid-containing drugs, which it strengthened through its acquisition of Panag Pharma, TBP is nimbly shifting clinical priorities to focus on developing its next-in-line, high-potential assets while managing its PPP001 refresh. With $13.5M in cash, TBP is well equipped to pursue its new drug development ventures, which will shift its focus toward indications and markets that will likely be more valuable to TBP than those initially addressed by PPP001; all the while, still moving quickly to re-initiate its PPP001 clinical program.”
In a research update to clients today, the Paradigm Capital analyst maintained his “Buy” rating and one-year price target of $1.50 on TBP, implying a return of 127 per cent at the time of publication, including dividend.
Sarugaser thinks Tetra Bio-Pharma will post Adjusted EBITDA of negative $11.0-million on zero revenue in fiscal 2019.
“We think TBP could be the next GW Pharma (GWPH), but with a deeper pipeline,” the analyst adds.
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