Stifel GMP is boosting its price target on Medexus Pharmaceuticals Inc (CVE:MDP) (OTCMKTS:MEDXF) to C$17.50, a whopping 130% increase over the $7.60 it had previously stated.
The increase is thanks to new developments related to its lead drug Treosulfan, an orphan drug designated conditioning treatment for patients undergoing allogeneic hematopoietic stem cell transplantation.
READ: Medexus Pharmaceuticals strikes licensing agreement to commercialize treosulfan in the US
Earlier this month the Canadian pharmaceutical firm struck a licensing agreement to commercialize Treosulfan in the US. At the time, Medexus told shareholders it expects that, if approved by the US Food & Drug Administration (FDA), a Treosulfan-based regimen will be the first in a new conditioning treatment class, Reduced Toxicity Conditioning, that will lead to improved survival outcomes and decreased toxicity compared to standard treatment regiments. As part of the licensing agreement, Medexus also raised $32.5 million through an upsized bought deal financing.
Analyst Justin Keywood at Stifel wrote in a February 24 research note that Treosulfan will “save more lives.”
“Treosulfan is already approved for use in the European Union and authorised to distribute in Canada through a Special Access Program, setting up well for expected FDA approval and an Aug. 11, 2021 PDUFA date,” Keywood noted.
Doubles company value
The analyst also pointed out that in a Phase III randomized study, Treosulfan demonstrated a 26% improvement in overall survival over 24 months for leukemia patients when compared to the incumbent treatment, busulfan.
“(We) forecast Tresulfan to reach near peak sales of busulfan, prior to genericization or around US$120 million with a de-risked regulatory review process ahead and near-term catalyst,” Keywood said.
“Overall, we estimate that Treosulfan essentially doubles the value of Medexus, and leading to our new $17.50 target price.”
Shares of Medexus were up 2.5% at the midday point of Wednesday trading in Toronto to reach C$7.79 and at US$6.21, a 4.2% increase on OTC markets.
Contact Angela at angela@proactiveninvestors.com
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