Futura Medical PLC’s (LON:FUM) data from a Phase 3 trial of its MED2005 erectile dysfunction treatment could drive the share price up over 500% according to analysts at Liberum Capital, who on Monday initiated the stock with a ‘buy’ rating and 60p target price.
In its initiation note, the ‘house’ broker for the AIM-listed pharma firm said they expected positive data from the Phase 3 trial for MED2002, which is expected to be delivered by December this year.
READ: Futura Medical on the rise as Liberum says newspaper article could spark interest in group’s main ED product
Liberum’s analysts believe there is a 70% chance that the Phase 3 study will yield a positive result, while they also forecast peak sales potential for MED2002 at £500mln, ten times the company’s current market cap of £50mln.
The broker added that the Phase 3 trial for MED2002 was “low-risk” as the study currently had 20 realistic outcomes, only one of which would mean the treatment could not be launched commercially.
As a result, Liberum said Futura’s current share price was a “very attractive entry-point” with even its risk-adjusted valuation pointing to upside in the shares of over 100%.
The bullish assessment sent the company’s shares up 8.4% to 24.7p in mid-morning, a 140% discount to Liberum’s target price.