Raymond James starts Medexus at OP; PT $5.50 (Canadian)


Raymond James initiated coverage of Medexus Pharmaceuticals (TSX:MDP) with an “outperform” rating and price target of $5.50 (Canadian). The stock closed at $3.32 on Feb. 18.

Medexus is a fully integrated, specialty pharmaceutical company that acquires/in-licenses products for Canada and/or the U.S. The company’s key therapeutic areas include autoimmune, rare diseases, pediatric indications and allergy.

“After emerging from a trying year in which the company received a complete response letter from the FDA and faced substantial inventory loading issues, we believe Medexus is now firmly back on track and the shares are likely to benefit from a significant market rerating on the back of growth acceleration and potentially positive regulatory outcomes throughout calendar 2022, writes analyst David Novak.

Following a productive Type A meeting with the FDA, Medexus’ partner, Medac, believes it has identified a viable path forward to resubmission of the Treosulfan NDA, which would not require additional clinical studies, he added. 

Mr. Novak said Medexus anticipates a resubmission of the Treosulfan NDA in the second quarter of 2022, with a potential FDA decision in two-to-six months following resubmission. 

“We believe the market currently attributes no value to Treosulfan approval in the U.S., and as such, a positive outcome would result in a potentially significant market rerating of Medexus’ equity,” he added.