Don’t count out Cipher Pharma, Research Capital says

A recent development sent shares of Cipher Pharmaceuticals (Cipher Pharmaceuticals Stock Quote, Chart, News, Analysts, Financials TSX:CPH) plummeting last week, but don’t count the Canadian specialty pharma player out, says Research Capital analyst Andre Uddin.

On September 13, Cipher partner Moberg Pharma noted that new info on its North American phase 3 study for MOB-015, a product for the treatment of nail fungus, came in worse than expected.

But Uddin says Cipher bears shouldn’t get too excited.

“Today, Cipher’s partner, Moberg Pharma (STO:MOB), announced an interim clinical update from the ongoing North American Ph3 study for MOB-015 against nail fungus,” he noted. “Cipher has Canadian marketing rights for MOB-015. The number of patients who achieved clinical cure (one of three parameters for the primary endpoint alongside negative fungal culture and negative microscopy) was lower than what Moberg had expected. Our view on MOB-015 has not changed. We highlight that MOB-015 showed very compelling efficacy in mycological cure from two previous Ph3 studies, and is already approved in 13 European countries (Austria, Belgium, Czech Republic, Denmark, Finland, France, Hungary, Ireland, Italy, Netherlands, Norway, Spain, and Sweden). We continue to believe that it should obtain Health Canada’s approval based on the EMA approval – there is a precedent for this happening historically (when a drug gets approved in the EU, it would be expected to get approved by Health Canada if the drug filing is sufficient). So far, we have very conservatively modeled the Canadian peak sales of MOB-015 at US$17.4M by 2030 (the drug has a C$92M market size in Canada where there is only one main product player). Our sales projections could significantly increase if the Ph3 trial results are positive. We believe this weakness for CPH should be temporary, and we expect that the stock should recover.”

In a research update to clients September 13, Uddin maintained his “Buy” rating and target price of $17.00 on CPH, implying a return of 18.9% at the time of publication.

Uddin believes CPH will post EPS pf $0.84 on revenue of $35.0-million in fiscal 2024.