We have started coverage on the common shares of ProMetic Life Sciences Inc. (TSE:PLI) with a “Sector Outperform” rating and 12 months target price of $3.00 per share. Our positive guidance for company is mainly derived from the attractiveness of its plasma-derived therapeutics platform, which has four low-risk products under development, one of which is anticipated to obtain regulatory approval in 2016.
We anticipate that investors benefit from a “free option” on PBI-4050, the lead drug in PLI’s traditional drug-development program, which could provide material upside to our guidance if it is successful in the clinic over the next one-year.
In our opinion, a number of events could be catalysts for the shares: (a) news of partnership agreements, (b) disclosure of development plans for additional plasma products, (c) completion of the plasminogen (Pg) clinical program, (d) the announcement of PBI-4050 clinical data from the Phase II trials, and (e) U.S. FDA approval of Pg.
Our target price is derived from a 2016 estimate DCF valuation of the firm of $2.99 per share (11.4% discount rate, 2% terminal growth rate), but it does not include any value for the pipeline of five to 10 undisclosed lowrisk development-stage plasma products we anticipate exist.
ProMetic Life Sciences Inc. (ProMetic) is a Canada-based biopharmaceutical company. The Company offers solutions in bioseparations, plasma-derived therapeutics and small-molecule drug development. ProMetic offers its technologies for large-scale purification of biologics, drug development, proteomics and the elimination of pathogens. The Company operates through two segments: Therapeutics and Protein Technology.
Clinical & regulatory risk, commercial risk and financing risk are potential risks to be considered while investing.