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RedX tipped for success as Cantor assesses pharmas

Cantor now rates RedX as a ‘buy’, and with a 105p target the broker sees some 150% upside to the current price of 41.5p.
RedX tipped for success as Cantor assesses pharmas
Redx could deliver potentially best-in-class products in its focus areas.

RedX Pharma (LON:REDX) is named among a number of blue-chip bio-tech firms and drug makers in an upbeat sector note by Cantor Fitzgerald entitled ‘in rude health’.

“The recent past has been difficult for the healthcare sector, with the notable exception of the medical device sector,” said Cantor analyst Dr Brian White.

“Much of this has been sentiment driven particularly given the ongoing rhetoric surrounding drug pricing in the US in an election year.”

White added: “Nevertheless, we believe that the fundamentals for companies with novel therapies targeting unmet needs remain positive and we believe that the industry has generally been responsible in its pricing, noting the pressure from payers in areas such as diabetes and respiratory for example.”

Cantor’s ‘top pick’ among the majors is AstraZeneca (LON:AZN) and it also rates Shire (LON:SHP), Hikma (LON:HIK) and Spire Healthcare (LON:SPI) as ‘buys’.

Meanwhile, White highlights that Redx has a pipeline of potentially best-in-class therapies targeting immuno-oncology and cancer stem cells.

The analyst says the fruits of Redx’s discovery engine should be able to deliver industry partners, though he believes ultimately it should contemplate taking on a greater share of risk with commensurately higher levels of reward.

“We believe that Redx has been able to deliver potentially best in class product candidates in its focus areas of oncology and infection,” White said.

“In oncology we believe that there is a need for combination approaches and Redx should be able to fulfil that need with its candidates which promise to accelerate partners’ activities in areas such as immuno-oncology and cancer stem cells.”

“In anti-infectives Redx has also been successful in delivering a new scaffold in Gram positive infections.”

Cantor now rates RedX as a ‘buy’, and with a 105p target the broker sees some 150% upside to the current price of 41.5p.

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September 28 2016

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