Mackie Research Capital raised its price target for Medicure (TSX-V:MPH) to $14.70 from $6.90, reflecting the recent acquisition of a majority interest in Apicore as well as a change in the trend of Aggrastat prescription data. The stock closed at $9.49 on Feb. 17.
“Besides Apicore's API (active pharmaceutical ingredients) base business, new significant, profit-sharing revenue opportunities should come into play from Apicore’s abbreviated new drug application portfolio, which is expected to come on stream shortly,” analyst André Uddin writes.
“In our opinion, the Apicore deal is highly accretive,” he added. “Apicore should significantly elevate Medicure’s growth rate and provide significant cash flow.”
Based on the quarterly script data, Mr. Uddin believes sales growth of Aggrastat is slowing down. Aggrastat is indicated to reduce the rate of thrombotic cardiovascular events in patients with non-ST elevation acute coronary syndrome.
“We have pushed out our assumption of the sNDA approval for the STEMI label to the first quarter this year” from the fourth quarter of 2016, he said. In addition, he is lowering his Aggrastat sales estimates from 2017 to 2020.
Mr. Uddin expects to see substantial growth for Medicure in 2017 and beyond. Medicure took on $60-million of debt to fund the Apicore acquisition. “In this circumstance, we believe debt was wisely used to purchase this high growth opportunity.”
Medicure is a catalyst play for 2017, with the expected approval of the Aggrastat sNDA, he added.