Correvio Pharma has tonnes of upside, says Mackie Research

Recent share price weakness makes for a buying opportunity on Correvio Pharma (Correvio Pharma News, Stock Quote, Chart TSX, NASDAQ:CORV), says Mackie Research analyst André Uddin, who in a Thursday update to clients maintained his “Speculative Buy” rating and $5.75 target, which represented a projected return of 203 per cent at the time of publication.

Vancouver-based specialty pharmaceutical company Correvio announced on Thursday that the US Food and Drug Administration had accepted the resubmitted New Drug Application for Brinavess, the company’s antiarrhythmic drug. The FDA has assigned a PDUFA date of December 24, 2019, and is planning on holding an advisory committee meeting.

Uddin is taking the event as a positive for the stock.

“Given Brinavess’s solid clinical data demonstrated in the SPECTRUM trial and previous Phase III studies, we believe there is a high probability for the FDA to approve Brinavess – we have assumed a US launch in 2020. Referring to the US sales of Tikosyn (Pfizer) and Multaq (Sanofi), we have forecasted Brinavess should generate peak sales of over US$200 million. We have also assumed CORV would out-license the US rights to Brinavess next year – which could provide estimated $50 million non-dilutive funds (upfront) to CORV,” he writes.

In addition, Correvio has released preliminary Q2 revenue results of between $7.2 million and $7.6 million, which would come in lower than Uddin’s estimate of $8.8 million and the consensus $8.3 million.

Based on the preliminary results, Uddin is lowering his total revenue estimate to $7.4 million and his Q2 SG&A estimate from $11.5 million to $10.5 million, while keeping his Q2 fully diluted EPS estimate at negative $0.21 per share. Correvio’s full Q2 is expected in August. (All figures in US dollars.)

“CORV has several catalysts expected in 2019, including: the European filing for Trevyent (expected in Q4), potential FDA approval for Brinavess and a potential BD transaction. We believe the recent weakness of CORV’s share price represents a buying opportunity,” writes Uddin.

For the full fiscal 2019, Uddin is calling for revenue of $35.8 million and fully diluted EPS of negative $0.78 per share.