Ergomed PLC's (LON:ERGO) co-development deal with Asarina Pharma AB for Sepranolone enhances its pipeline, says broker N+1 Singer, which repeats a 'buy' rating and lifts the target by 10p.
Last week Ergomed was contracted to conduct the phase IIb clinical study of the treatment designed for women suffering from premenstrual dysphoric disorder (PMDD). Ergomed will invest in the trial in return for a stake in Asarina.
The trial is expected to start in 2017 and is estimated to last around two years.
The Ergomed portfolio currently has five partners - Asarina, Aeterna Zentaris, CEL-SCI, Ferrer and Modus Therapeutics, noted analyst Sheena Berry, with clinical data from three of them due in the next 12 months,
Ergomed is aiming to build this co-development portfolio to 10 agreements in the medium term.
"We continue to favour Ergomed’s integrated business model that combines a profitable and growing service offering with significant upside potential from the co-development/development business," said Berry.
"The current share price is well underpinned by the services business," she added.
N+1 Singer has a target price of 275p on the shares from 265p previously. Shares are at 129p at the time of writing.