Brokers' views: Edison Investment Research

Paid-for research house Edison highlighted the potential of a number of pharma companies this month. Firstly, drug discoverer ImmuPharma (IMM) was identified as providing an ‘encouraging’ update of late on the progress of its cancer product IPP-204106 (N6L).

The analysts in the healthcare team noted that while three of the seven patients treated with the drug were in a stable condition, ‘we would be cautious in ascribing clinical significance at this stage’, adding that phase IIb trials in three cancers may start in 2011.

Edison argues that a risk-adjusted NPV ‘indicates a valuation of £190 million’ which, they add, compares to an ‘enterprise value of around £50 million’ – though Edison caution that ImmuPharma ‘remains sensitive to exchange rates as 75 per cent of its cash is held in US dollars.’

Funding secured
There was also a comment on the placing by fellow drug discoverer e-Therapeutics (ETX) that raised £17.6 million. Analysts Lala Gregorek and Dr Mick Cooper remark that the use of the proceeds will be ‘split between clinical development of four lead drug candidates’ as well as to secure ‘further drug discovery collaborations’.

The key drugs in e-Therapeutics’s portfolio include cancer therapy ETS2101, C difficile killer Clostriban, antidepressant Viotra and MRSA treatment Mersanex.

Valuing the company with an enterprise value of £19 million, they add that ‘pipeline progress and business deals’ would ‘represent upside’ at the company using consensus estimates to pencil in losses of £3.82 million for the year to January.