ImmuPharma (LON:IMM) – BUY*: Initiation of coverage
Market Cap: £42m; Current Price: 35p; Target Price: 171p
We initiate coverage with a 171p price target
(Note attached)
Blockbuster potential: We expect Lupuzor could achieve multi-billion dollar annual sales as a potential treatment for Lupus. The drug has also recently shown promise in several other major chronic inflammatory indications.
Unmet medical need: Lupus is a chronic inflammatory disease which is thought to affect some 5 million individuals worldwide. Existing treatments offer marginal efficacy while leading to significant side-effects.
Strong regulatory position: Lupuzor has received Fast-Track and Special Protocol Assessment designations from the US Food and Drug Administration.
Valuation: Our DCF model indicates a fair value of 171p/share, at which we set our Target Price
NORTHLAND CAPITAL PARTNERS VIEW: ImmuPharma PLC is grossly undervalued. The company’s flagship drug, Lupuzor—a potential treatment for Lupus—is currently completing a Phase 3 clinical trial which is expected to read-out top line results before the end of 2017. The drug has been looked upon favourably by US regulators, which have deemed it a priority treatment. Should the drug be approved, we estimate it could achieve multi-billion dollar annual sales. We initiate coverage with a 171p target price, indicating substantial upside to the current share price.
W Resources (LON:WRES) – BUY*: La Parrilla update
Market Cap: £15.8m; Current Price: 0.4p; Target Price: 1p
Stage 2 expansion brought forward
W Resources has completed mine planning and optimisation of the initial La Parrilla open pit mine.
Initial hard rock production of tungsten bearing concentrate continues to be expected in Q416 and will use the existing concentrator, infrastructure and approvals (Stage 1).
The expansion of the plant (Stage 2) is now expected to be completed in mid-2017 rather than the start of 2018, ROM is expected to be processed at a rate of 1.95mt per annum with 2,500t per annum of WO3 bearing concentrated produced (66% WO3).
The Stage 3 expansion is expected to commence in 2020 at a rate of 3.5mt per annum (ROM) with 5,000t per annum of WO3 bearing concentrated produced (66% WO3).
The optimised mine plan is expected to result in lower strip ratios, lower opex and higher tungsten and tin concentrate production. No material increase in capex is expected.
Grade control drilling and drilling of the extension to fast track mine to the north and south is underway that could further extend the mine life.
Forecasts, price target and rating maintained.
NORTHLAND CAPITAL PARTNERS VIEW: W Resources has accelerated the Stage 2 expansion to mid-2017 from the start of 2018 and remains on track for initial production (Stage 1) in 2016. The Company is seeking to fund the Stage 1 production through initial customer off-take contracts and is continuing negotiations regarding a joint venture or debt funding of Stage 2. We have not updated our forecasts or price target to reflect the acceleration of Stage 2 or Stage 3 being one year later than our expectations as the full results of the optimisation study is expected in due course and will provide greater clarity on opex, capex and other operational metrics.