Analysis Downgrade LMNL after Q2 New TP of $2.50. Liminal gave, paid to, give away the farm.
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| | Liminal BioSciences Inc. | LMNL-NASDAQ | | | | RATING: HOLD Target: US$2.50 | | | | FQ221 Update Features Divested Plasma Products Assets As Much As Its Continuing Drug Development Activities. Well-Funded, But Still A Hold On Pipeline Risk | | | | QB-based therapeutics developer Liminal Biosciences reported FQ221 financial data for the June-end quarter that were as populated with elements of discontinued operations as they were of details germane to ongoing small-molecule drug development efforts, and thus were of minimal consequence to our LMNL valuation as such.
FQ221 financial summary focuses as much on divested plasma products operations, and the cash that divestiture generated, thus providing supplemental cash to fund continuing drug development activities. Indeed, most of Liminal’s recent business development efforts have been focused more on how to divest its plasma products operations (accomplished last quarter and sold to Italy-based specialty pharmaceutical firm Kedrion SpA [private]), on advancing FDA review of legacy affinity-purified plasminogen formulation Ryplazim (approval granted earlier this quarter), and then on monetizing the Rare Pediatric Disease Priority Review Voucher (PRV) ascribed to that now-approved protein-based therapy (also achieved post-quarter-end) than on continuing drug development activities, but the aforementioned discontinued operations have in the last quarter so generated abundant pro forma cash that we expect Liminal to deploy into its small-molecule drug development efforts, as we describe below. | | | | by Douglas W. Loe, PhD MBA | | |