Edison Investment Research Limited
London, UK, 29 September 2020
Edison issues initiation on Pharnext (ALPHA)
Pharnext is a pharmaceutical company that develops new therapies leveraging pleiotropism, which is the idea that drug combinations can have effects outside of their individual canonical mechanisms. This provides access to novel methods of treating disease, which the company has used to develop its lead drug PXT3003 for Charcot-Marie-Tooth disease type 1A (CMT1A, entering Phase III in Q121). We initiate with a valuation of €239.5m or €12.48/share.
We are initiating at €239.5m or €12.48 per share based on a risk adjusted NPV analysis. We only value PXT3003 and we assume it will have an above average probability of success of 60% based on the previous Phase III results. The company ended 2019 with €1.3m net cash and we forecast it will need additional capital in 2020 (an estimated €30m) with €95m in total before 2024.
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