Tetra Bio-Pharma gets price target raise at Paradigm Capital

News from Tetra Bio-Pharma (Tetra Bio-Pharma Stock Quote, Chart TSXV:TBP) has Pardigm Capital analyst Rahul Sarugaser raising his price target on the stock.

This morning, Tetra Bio-Pharma announced it is ready to resume its phase 3 clinical program in advanced cancer pain patients with the objective to assess health-related quality of life. The company says it will use a vaporizer to deliver its new drug, PPP-001, in what is called The Serenity Study.

“I am extremely pleased with Tetra’s ability to quickly resolve the problem that required us to suspend our clinical trial in advanced cancer pain. With great challenge comes great opportunity and what we are now able to deliver is a better and more reliable product,” CEO Dr. Guy Chamberland said. “The continuation of our research is excellent news, not only for those suffering with advanced cancer pain and other symptoms but also for our investors. I look forward to the day when Tetra’s cannabinoid-derived drugs will help reduce, if not eliminate the reliance on drugs like Fentanyl, Oxycodone or morphine and that hopefully the study drug will be able to bring serenity to patients in their difficult journey through the disease.”

Sarugaser says this development is a clear positive.

“Resumption of its Phase 3 trial is excellent news for TBP, and as we previewed two weeks ago, there are several other near-term milestones we expect TBP to hit in 2019, including: Advancing PPP002 into an FDA phase 2 trial likely in H2/19, and Two additional FDA Phase 2 trials in eye indications, likely registered in H2/19.”

In a research update to clients today, the analyst maintained his “Buy” rating on TBP, but raised his one-year price target on the stock from $1.50 to $1.75, implying a return of 134 per cent at the time of publication.

Sarugaser thinks the company will post an EBITDA loss of $11.0-million on zero revenue in fiscal 2019.

“The resumption of this Phase 3 trial, particularly now that it is registered with the FDA as well as Health Canada—increasing its market by 10 times—when it begins would likely be significantly accretive to our valuation. For now, we are re-assuming our $1.75 valuation from before the Phase 3 trial was put on hold,” the analyst adds.