finnCap has reinforced its optimistic outlook for Evgen Pharma PLC (AIM:EVG), repeating a 'buy' recommendation for the biotech company and maintaining a price target of 20p per share.
In a note, the corporate broker outlined a number of milestones in 2023 acting as potential value inflexion points.
Eluvgen Pharma's primary focus is on the development of sulforaphane-based compounds for multiple medical conditions, including specific types of cancer.
As such, the company is expecting key results from its research, particularly data related to its drug Suforadex's Phase I PD/PK trials, and preclinical data for SFX-01, which is being studied for several applications.
The SFX-01 drug is being investigated as a potential game-changer in three areas. First, as a radiosensitising agent, it could potentially improve the efficacy of radiotherapy in cancer treatment.
Second, it could offer a new treatment option for a specific type of breast cancer that has become resistant to current first-line treatments. And third, it's also being examined as a potential treatment for colorectal cancer.
Financially, Evgen is also expecting milestone payments from its partnerships with STALICLA and Juvenescence, which should provide additional financial stability for the company into 2025, finnCap said in its note.
In the fiscal year ending in March 2023, Evgen reported a pre-tax loss of £5.0m, which was slightly higher than expected due to increased spending on research and development (R&D) and chemistry, manufacturing, and controls (CMC).
However, the net loss was offset to some degree by higher R&D tax credits, reducing it to £4.0m. At the end of this period, the company had net cash of £5.0m.