Investors should be thinking about clinical-stage biotech company Medicenna Therapeutics (Medicenna Therapeutics Stock Quote, Chart TSX:MDNA), according to Mackie Research analyst André Uddin, who in an update to clients on Wednesday said the market is currently undervaluing the stock.
On Tuesday, Medicenna announced its fiscal fourth quarter ended March 31, 2019, financials, coming in with revenue of $0.0 million and a net loss of $1.0 million. Although he says that the company’s financials are less important at this stage in its development, Uddin was expecting revenue of $0.0 million and a net loss of $4.0 million. The smaller net loss Uddin chalks up to lower-than-expected R&D expenses, while the analyst notes that MDNA’s total cash resources of $4.8 million and zero debt should be sufficient to fund the company’s operations until the completion of the ongoing Phase IIb trial of its lead orphan drug candidate MDNA55 for glioblastoma.
“On June 18th, the company reported promising interim top-line results, which not only demonstrated decent dose-dependent responses by MDNA55 but suggested this candidate should have a high probability of meeting the primary endpoint (objective response rates) of this trial,” writes Uddin.
“Of equal importance, MDNA55 demonstrated superior response and survival benefits relative to other approved rGBM drugs – which should bode well for future commercialization of this candidate,” he said.
As for upcoming milestones, Uddin points to survival results of high-does MDNA55 in the on-going Phase IIb trial, expected by the end of 2019, and the expected launch of a Phase II trial by the end of 2019to investigate efficacy and safety of MDNA55 in treating newly-diagnosed glioblastoma patients.
Uddin notes that MDNA has traded up 131 per cent since Mackie’s coverage initiation but that the stock is still undervalued.
“With a late-stage cancer candidate (MDNA55), the company only has an enterprise value of $39 million – it’s undervalued. Additionally, we believe the market has not considered the monetization potential of MDNA’s pre-clinical candidates,” he says.
Uddin is maintaining his “Speculative Buy” rating and $3.30 target price, which represented a projected 12-month return of 110 per cent at the time of publication.
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