Zyus Life Sciences is a buy, Roth says

Following the news of funding, Roth MKM analyst Scott Fortune has maintained his “Buy” rating on Zyus Life Sciences (Zyus LIfe Sciences Stock Quote, Chart, News, Analysts, Financials TSXV:ZYUS).

On September 5, ZYUS completed a private placement of $3.33-million at the price of $0.95.

The analyst summarized where ZYUS is at right now.

“ZYUS continues progressing toward beginning patient enrollment for its planned Phase 2 clinical trial of its novel cannabinoid-based drug for pain management, Trichomylin. While the company has received both its cannabis drug license and a No Objection Letter from Health Canada for a proof-of-concept trial, ZYUS still needs to obtain licenses from each site trial to begin its Phase 2 trial to assess preliminary efficacy and feasibility of Trichomylin softgel capsules in patients with advanced cancer and moderate to severe cancer-related pain,” He wrote. “We view the issued Health Canada licenses and its recently granted U.S. patent for the treatment of pain using a non-opioid-based form as a viable alternative for managing pain as steps to derisk the lead drug. We believe it is the first time a U.S. patent has been awarded for a cannabinoid fixed-dosed formulation containing CBC, CBD, and THC. While unexpected permit delays push out the Phase 2 trial to late fall, and the company looks to address additional financial needs, we believe the next significant catalyst is expected from preliminary Phase 2 data in mid-2025.”

In a research update to clients September 20, Fortune maintained his “Buy” rating and price target of $4.00 on ZYUS.

“Our C$4.00 price target is derived using a 13-year, 2 stage DCF analysis using a 25% discount rate, a 1% terminal growth rate and a 20% probability of success on Trichomylin, a 5% on its neuropathic formulation and 0% on its third candidate at this time. Our initial valuation excludes Canadian and international markets and potential upside to both its second and third formulations, which, if commercialized, represents a re-rating opportunity for the stock,” he added.