Analysts at Canaccord Genuity (TSX:CF, LSE:CF) have upped their revenue forecast for MGC Pharmaceuticals by 45% following recent positive developments at the pharmaceutical company.
On March 21, MGC announced that one of its flagship products ArtemiC, a natural anti-inflammatory and nutritional supplement, had gained the status of an over-the-counter (OTC) product in the United States.
The analysts pointed out in a note to clients that by gaining OTC status, ArtemiC can be sold without a prescription and in conventional American pharmacies.
“This represents a large opportunity for MGC Pharma as it enlarges the sales channel in the US and facilitates the sales of ArtemiC,” they wrote.
The analysts also highlighted that, following the announcement, MGC’s US-based distributor AMC had submitted a $2mln purchase order for ArtemiC.
As such, the analysts said they were updating their forecasts for the company, accounting for the new revenue generated by the AMC order.
“In our previous report we forecast A$7.1mln in revenue for 2023E, which is now increased to A$10.3mln, representing a 45% increase,” they wrote.
They added that, with MGC’s Maltese facility expected to receive EU-GMP certification within the first half of 2023, “it was plausible to assume that this latest order could have significantly higher margins.”
The analysts held their ‘Speculative Buy’ rating and 2p or A$0.04 price target on the stock, based on a 34x 2026E P/E multiple.
The dual-listed company closed at A$0.01 in Australia on Wednesday and was trading at 0.53p in London on Wednesday afternoon.
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