Analysts at FinnCap have upgraded their forecasts and target price for Evgen Pharma PLC (AIM:EVG) following the drug-development company’s partnership deal with Switzerland-based biotechnology company, Stalicla.
The partnership is for the investigation of Evgen's lead SFX-01 as a potential treatment for autism spectrum disorder and other central nervous system disorders.
The deal could generate up to US$160.5mln in milestone payments and double-digit royalties on end-market sales, therefore extending EvGen’s cash runway into at least the 2025 fiscal year, according to the analysts.
“As Evgen has a March year-end, we now forecast an additional $500,000 cash inflow in fiscal year 2023 and $5.5mln in fiscal year 2024, with operational losses and loss per share estimates reducing versus current forecasts as a result,” they said in a note to clients.
Evgen's share price target has been increased to 20p from 18p, as a result, the finnCap analysts added.
With greater spending power on Evgen’s balance sheet, research and development costs for 2024 are now “markedly higher”, the analysts concluded.