Paradigm Biopharmaceuticals (ASX:PAR) is focused on repurposing the historic drug PPS (Pentosan Polysulfate Sodium) as a potential new treatment for Bone Marrow Edema (BME) lesions following traumatic injury.
The company has recently come under the spotlight of brokers.
Baker Young has a Buy Recommendation on the stock with a $1.16 per share price target, while DJ Carmichael applying a Speculative Buy and a risked valuation of $1.32 per share.
Paradigm last traded at a significant discount to these prices, at $0.40 per share.
Following are some key finding from the broker reports.
Hay fever Phase II Trial Nears Completion – Results Readout Q2/Q3 CY2017
We maintain coverage of Paradigm with a BUY recommendation and have increased our valuation to $1.16 per share due to Phase II hay fever trial nearing completion.
Our valuation is derived from using a combination of probability weighted DCF methodology ($1.18) and peer group valuation ($1.14 implied PAR share price).
Our target price of $1.16 per share sits in the midpoint of our valuation range.
Phase 2 hay fever clinical trial on schedule and budget
We maintain our Speculative Buy recommendation. We stress that PAR is significantly under-valued compared to peers who have compounds undergoing Phase II trials.
We believe a successful outcome will be a major catalytic event for PAR and is likely to initiate interest from big pharma who are looking to replace revenues from drugs going off-patent.
Our valuation remains between A$120M and A$152M which corresponds to share price of A$1.18 and A$1.50 respectively, or a mid-point of $1.34 per share.