This broker says Botanix Pharma’s share price could more than triple on an FDA approval
Broker Euroz Hartleys sees a huge upside for Botanix Pharma, putting a Speculative Buy call on the company with a target price of 27c vs the current price of 6c.
Euroz believes Botanix could get an FDA approval in Q3 after the US agency said the Sofpironium Bromide New Drug Application (NDA) submitted by Botanix last September is now formally under review.
The FDA has granted Sofpironium Bromide a standard review (as expected), and confirmed that an advisory committee meeting will not be required. Advisory committees are sometimes convened to assist in the review of complex applications.
In the meantime, an FDA mid-cycle review is due to be completed in Q1, which means we will get further feedback on the progress of the FDA review.
“Overall, we view this is as yet another milestone met, bringing BOT one step closer to potential FDA approval, and in time commercialisation,” said the note out of Euroz Hartleys.
“BOT remains very cheap and continues to trade at a significant discount to peers, this is despite the company making solid progress with its lead asset Sofpironium Bromide amongst other recent positive news.”
Euroz Hartleys believes Sofpironium Bromide could potentially do +$130m of sales in the US within its first year based on the number of prescriptions the drug is currently doing through its partner in Japan, a country which has a population nearly a third the size of the US.
Botanix’s Sofpironium Bromide is a drug that treats primary axillary hyperhidrosis, a condition where excessive sweating occurs beyond what is needed to maintain normal body temperature.
Euroz Hartleys has increased its price target for Silex from $4.30 to $4.40 (current price $4.27) after attending the company’s recent roadshow.
The broker has also maintained its Speculative Buy rating on SLX.
Silex’ main product is its laser technology that can be used in uranium production, silicon enrichment, and medical radioisotopes.
Euroz Hartleys believes there are several tailwinds for the company.
The first is that nuclear fuel cycle prices are currently at 10-year highs, reflective of Western utilities weaning off dependence on Russia’s nuclear fuel supply chain.
As a result, supply anxiety continues to provide a highly supportive backdrop.
Secondly, the US Department of Energy (DOE) funding will be a material catalyst.
The US government has appropriated US$700m to the US DOE’s HALEU Availability Program under the Inflation Reduction Act of 2022 to support the establishment of domestic HALEU production capability.
The third catalyst is that Cameco Corp, the world’s largest publicly traded uranium company, holds an option to acquire an additional 26% equity interest in GLE from SLX at fair market value, which becomes exercisable from this month.
GLE, or Global Laser Enrichment, is the exclusive licensee of the SILEX technology.
Euroz Hartleys has downgraded its target price for Vysarn from 13c to 12c following the company’s recent update on its long term strategy (current price is 10c). The broker however has maintained its Buy rating.
Vysarn provides hydrogeological drilling, dewatering and test pumping services at a number of mine sites across WA.
The broker believes the demand for these services will keep growing, with water management and stewardship reported as the number one ESG issue (ahead of decarbonisation) in the metals and mining sector.
Vysarn has recently released initial guidance for FY23, forecasting NPBT of $5.1m, up 25% from $4.1m in FY22.
However, the company has also forecast $7.7m of lower utilisation in rig fleet during the first half, with a number of rigs being pulled from the field for upgrades to meet BHP standards.
These rigs will be redeployed through FY23, with the company looking for full utilisation in the second half.
“We have pulled back our FY23 numbers to reflect the first half utilisation,” said the note from Euroz Hartleys.
“We acknowledge shortcomings of this methodology given it ascribes no value to execution of long term strategy around water management.”
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