Following a finance move from the company, Raymond James analyst Rahul Sarugaser believes there is a lot of upside to Medexus Pharmaceuticals (Medexus Pharmaceuticals Stock Quote, Chart, News, Analysts, Financials TSX:MDP).
On October 16, Medexus announced it had fully repaid its $51.1-million convertible debenture due that day.
The analyst says this could mean a rally for investors.
“With MDP extinguishing its entire convertible debt today, we believe MDP has worked itself out of a material overhang, potentially giving rise to significant upside in the stock,” Sarugaser said.
In a research update to clients October 16, the analyst maintained his “Outperform 2” rating on MDP and target price of $4.00.
Sarugaser summarized his take on MDP, with an eye towards a slightly longer term.
“Pipeline assets that could be key to MDP’s medium-term Rev. and EBITDA growth include MDP’s recently-licensed topical terbinafine in Canada ($80-90 mln market with 1 incumbent player) and treosulfan (new FDA resubmission timeline issued with 1Q24 results; favourable MDP/medac license amendments disclosed Sep. 28). We expect a 12-month review of this application prior to potential approval. Following approval, treo would likely be granted exclusivity for 7.5 years under Orphan Drug protections (so, approval timelines do not affect market potential of the drug, as they would in the case of drugs only protected by soon-to-expire patents).”
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