Shares of Cipher Pharmaceuticals experienced a decline following an announcement from its partner, Moberg Pharma, regarding interim clinical data from the ongoing North American Phase 3 study of MOB-015, a treatment for nail fungus (onychomycosis). The data indicated that the number of patients achieving clinical cure, one of the primary endpoint parameters, was lower than anticipated.
Despite this setback, Research Capital analyst Andre Uddin remains optimistic about Cipher's prospects. Uddin emphasized that MOB-015 has demonstrated compelling efficacy in mycological cure in two previous Phase 3 studies and is already approved in 13 European countries, including Austria, Belgium, Czech Republic, Denmark, Finland, France, Hungary, Ireland, Italy, Netherlands, Norway, Spain, and Sweden.
The analyst anticipates that MOB-015 will likely secure approval from Health Canada based on the precedent of EMA (European Medicines Agency) approvals leading to Canadian approval, assuming sufficient drug filing. Uddin conservatively projects peak Canadian sales of MOB-015 at US$17.4 million by 2030, noting that the Canadian market for nail fungus treatments is approximately C$92 million, dominated by a single main product. Positive Phase 3 trial results could significantly increase these sales projections.
In a research update, Uddin maintained a "Buy" rating and a target price of $17.00 on Cipher Pharmaceuticals, implying a potential return of 18.9%. He estimates Cipher will post EPS of $0.84 on revenue of $35.0 million in fiscal year 2024. The analyst views the current stock weakness as temporary and expects a recovery.
