Still undervalued? ProMIS Neurosciences keeps $9.50 target price at Leede

The U.S. FDA has granted Fast Track designation to ProMIS Neurosciences’ (ProMIS Neurosciences Stock Quote, Chart, News, Analysts, Financials NASDAQ:PMN) Alzheimer’s candidate PMN310, sending the company’s shares up more than 150% on July 21.

The stock closed at US$1.12, up from US$0.44, after peaking at US$1.38 earlier in the session. Leede Financial analyst Douglas Loe called the designation a positive signal for novel Alzheimer’s therapies. Despite the rally, ProMIS shares are still down 28% over the past year and 85% since 2020.

“This favourable status was granted even though three other non-oligomer-selective mAbs (monoclonal antibodies) in Biogen’s aducanumab, Eisai’s lecanemab and Eli Lilly’s donanemab were previously approved by the agency, thus showing us that the FDA sees limitations in the existing Alzheimer’s disease therapy hierarchy even after aducanumab/lecanemab/ donanemab were made available through recent approvals,” Loe said in his same-day update. “One of these mAbs — Biogen’s aducanumab — has in fact been withdrawn from the market (announced in Jan/24, marketing formally discontinued in Nov/24).”

Loe said that while Fast Track status doesn’t guarantee PMN310 will succeed in future Phase II or III Alzheimer’s trials, it should help speed up the review process if positive results are submitted.

“Fast Track Status is … a mechanism by which the U.S. FDA recognizes that approved therapies for treating a disease are limiting in some way, either because existing drugs only work in a defined subpopulation of diseased patients, or because even if existing drugs work acutely, they do not confer chronic benefit even with chronic use, or because existing drugs are just not that effective in comparison to their price or to expectations,” he said.

Loe said that while today’s share price jump is a positive development, it mostly brings ProMIS back to a baseline level where the market is still heavily discounting the clinical value of PMN310.

“Until today, the company was trading at an enterprise value of essentially zero—by any measure typically used to value clinical-stage assets,” he said.

Leede is keeping its “Speculative Buy” rating and (US) $9.50 rating price target on ProMIS, valuing the stock using a 30% NPV discount and 2029 EBITDA and EPS multiples. The EV model assumes US$8.4-million in Q1 2025 cash, no long-term debt, and 79.3 million fully diluted shares, including warrants issued in the July 2024 financing.

Loe expects ProMIS to begin generating revenue in 2028, forecasting $26.6-million in Adjusted EBITDA on $36.0-million in revenue. By 2029, he projects a significant increase to $136.8-million in EBITDA on $147.0-million in revenue.

“We are encouraged by the ricochet exhibited in PMN share value from what we believe were trough levels for both share value and enterprise value ascribed predominantly to PMN310,” he said. At current levels, our PT corresponds to a one-year return of 705%, a seemingly aggressive notional return but one that we believe is achievable if PMN310 performs as well clinically on cognitive impairment reversal and biomarker profile improvement in PRECISE-AD (its proposed or upcoming Phase 2/3 clinical trial framework for PMN310) as all preclinical/Phase I data generated so far predicts that it could.”

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