Liminal BioSciences Inc. PFSCF

RE:Cantor Fitzgerald: Overweight rating & $4.00 target for PLI

[37minus4]

I think this is worth reposting, just so we know what we're talking about!
;-)
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stockmaster989 wrote: According to Cantor Fitzgerald:
 
https://app.box.com/s/9xvrfs24sxlccd80r5zs1zbgb8zdmz1n
 
Prometic Life Sciences, Inc. (PLI.TO- C$1.37)
 
Rating: Overweight
 
Price Target: C$4.00
 
Removing Overhangs with New Product Offerings; Initiating with Overweight, C$4 PT
 
Investment Summary. We are initiating coverage of Prometic Life Sciences with an Overweight rating and a C$4 price target. The company's base plasma and bioseparations business provides revenue, but it is the new product candidates that we believe can drive the share price valuation. The company has a regulatory approval pending for Ryplazim and potential upside from other plasma-derived products (IVIG) as well as from small molecule efforts such as PBI-4050. We believe that Prometic’s late-stage drug development activities are only modestly reflected in the company's valuation and that the variability of the current revenue stream creates an overhang on the shares. Our C$4 price target is based on a DCF model through 2028.
 
• Ryplazim on Deck. Prometic has an BLA for the orphan indication of congenital plasminogen deficiency, and a PDUFA of April 14th, 2018 has been assigned. Although the indication is modest, with a prevalence of just 1.6 patients per 1,000,000, there are limited treatment options. However, with additional indications, such as acute lung injury, diabetic foot ulcers and others, we think peak sales could exceed $500 million.
 
• Core Competency in Bioseparations. At the core of Prometic's business is the plasma separations business, which we think should generate $16 million in revenue this year, excluding one-time payments expected from a licensee. Although revenues from this business can fluctuate, we believe that, over time, this business will become neutral to earnings and that the synergy from the core bioseparations technology and plasma collection business will be incremental to the therapeutics business.
 
• Coming out from Under Overhangs. We think that Prometic's shares have struggled due to expectations about the bioseparations and plasma collection business and because of concern about investment in the drug development pipeline. Given that the company appears to be on the cusp of a commercial launch, we think these overhangs could recede with commercial success.
 
• Valuation. Our price target is C$4, which is based on a DCF model that assumes Ryplazim sales in multiple indications as well as royalty income for PBI-4050, a novel small molecule for idiopathic pulmonary fibrosis and other indications.