Impressive interim outcome data from Sernova Corporation (Sernova Corporation News, Stock Quote, Chart TSXV:SVA) has Echelon Wealth Partners analyst Douglas Loe staying bullish on the regenerative medicine tech company.
In a Wednesday update to clients, Loe reiterated his “Speculative Buy” rating and $1.00 target price, representing a projected return of 317 per cent at the time of publication.
At a recent medical conference in Lyon, France, Sernova reported on an initial patient enrolled in its University of Chicago-based Juvenile Diabetes Research Foundation (JDRF)-supported seven-patient type I diabetes (T1D) trial testing the firm’s lead implantable cellular therapy reservoir technology Cell Pouch. The Cell Pouch performed well on all metrics, says Loe.
“As reported by Witkowski and Sernova earlier [on Wednesday], Cell Pouch met virtually all of the performance specifications that it would need to meet to demonstrate its medical utility as a regenerative medicine-enabling cell reservoir platform, with the device demonstrating high levels of vascularization (blood vessel formation throughout the device, thus facilitating deployment of islet-derived glucose-dependent insulin into circulation), with stabilization of blood glucose levels without co-administration of other anti-hyperglycemia therapies, including insulin supplementation itself,” says Loe.
Loe is optimistic, saying that he sees no reason to assume that the Cell Pouch as used by other patients in the trial with similar disease profiles cannot exhibit similarly strong performance.
“On the milestone watch, we expect new case data from the University of Chicago T1D/Cell Pouch program to generate new case data in coming quarters and for the trial to lead directly into formal pivotal T1D testing once concluded, possibly by end-of-F2020, and we look for tangible updates on both the hemophilia A and hypothyroidism preclinical programs within the next few quarters,” says Loe.
The analyst is forecasting zero revenue in fiscal 2021, $380,000 in fiscal 2022 and $10.3 million in fiscal 2023. He is calling for EBITDA in fiscal 2021 of negative $2.4 million, in fiscal 2022 of negative $1.9 million and in fiscal 2023 $2.5 million.
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