Treasure Chest | Oct 15 2012
Healthcare analysts at RBS, Scott Power, Tanya Solomon and Jack McManus suggest this morning shares in local biotech Pharmaxis ((PXS)) look good value at present levels.
Why?
The analysts participated in the quarterly investment call last week which (obviously) re-affirmed their positive stance on the company and its outlook. Equally important, probably, the analysts report there is some takeover speculation surfacing. The RBS trio reiterates the Buy recommendation while lifting the price target to $1.53 from $1.30 prior. The shares last traded for $1.34 on Friday.
Amongst the positives derived from the investment call is the fact that feedback from the centres in Germany has been "uniformly positive" and RBS is now talking about "momentum improving" for Pharmaxis.
Investors should also note the following positives (lined up by RBS):
– in Australia, Bronchitol has been approved for marketing to people with cystic fibrosis aged 6 years and over since early 2011 but has only recently been listed on the Pharmaceutical Benefits Scheme;
– the application is through a New Drug Application (NDA) and it is currently in active and detailed review by the FDA, with a target date for completion of the review of 18 March 2013
On current forecasts, Pharmaxis is not expected to turn profitable until fiscal 2015 and the company is anticipated to start paying a dividend from that year onwards (projected 2c).
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