| ProMetic provided an update on the ongoing clinical study extension for plasminogen IV (brand name Ryplazym), reporting that 10 patients treated for 48 weeks had no recurrence of lesions and no safety or tolerability issues. We believe this supports our view that Ryplazym has shown strong safety and efficacy in this clinical trial, and we maintain our expectation that the drug has a very good chance of FDA approval. That said, we believe the regulatory pathway remains hazy, as we have seen no indications that the FDA has accepted the BLA filing. And, while we continue to believe that Ryplazym has a high likelihood of receiving a Priority Review, we are unsure if the drug will have a PDUFA date before the end of the year. We continue to see a number of catalysts lined up for ProMetic in coming weeks and months including the potential for an abbreviated Priority Review for plasminogen, and more clinical data from PBI-4050 in Alstrm syndrome. Investment highlights - Shifting timelines create uncertainty around timing of FDA decision. Although the FDA’s inspection of ProMetic’s manufacturing facility remains on schedule, the Agency has also requested additional information (we assume relating to CMC), which could modestly extend timelines into early 2018. The plasminogen BLA is supported by strong clinical data, Orphan Drug designation, and an Accelerated Approval pathway. As such, we still see a strong likelihood that plasminogen could receive a Priority Review from the FDA.
- Planning the global roll-out of Ryplazym. With this positive long-term data in hand, ProMetic plans to file for approval of Ryplazym with Health Canada in the fourth quarter of this year. Further, the company is advancing discussions with the EMEA regarding a pathway to European approval and will provide an update in coming months.
- ProMetic submits more data to support Priority Review voucher. ProMetic has provided additional data to the FDA supporting its view that serious and life-threatening effects of plasminogen deficiency occur primarily in children, which would support the company’s request for a Rare Pediatric Disease Priority Review voucher. If granted, we believe that a Priority Review voucher could be a valuable asset.
Valuation We value ProMetic based on a sum-of-the-parts. We value the resin business using a DCF analysis (8.1% WACC and 2.0% terminal growth), plasma-derived therapeutics with an explicit NPV, and the small molecule pipeline with a pNPV. Based on this analysis, we arrive at a target price of $4.50; our target implies a 178% annualized return and continues to support our BUY recommendation. |