Destiny Pharma: Broker sees 700% upside on latest deals
This morning, broker Equity Development released a new note on Destiny Pharma #DEST putting a target price of 267p on its shares, over 700% higher than the company's current share price.
Justification
On 24th February Destiny Pharma signed an exclusive collaboration and co-development agreement for the North American rights of NTCD-M3, its lead asset for the prevention of Clostridioides difficile infection (CDI) recurrence, with Sebela Pharmaceuticals®, a U.S. pharmaceutical company.
This deal is worth up to $570m plus royalties. Alongside the deal Destiny also raised £7.34 million from a placing and subscription at 35p, which Equity Development says could mean the company "may be self-funding from hereon".
It's worth noting that this is just one of Destiny's late stage assets. Its second, XF-73 Nasal, has a projected peak market sales, twice the size of that of NTCD-M3, estimated to be worth $1 billion+.
The fundraise de-risks NTCD-M3 as it now means Destiny has no financial burden in taking it into phase 3 clinical trials.
Nick Rodgers, Chairman of Destiny Pharma recently commented: "Management's estimate of the Net Present Value (NPV) for NTCD-M3 is some $200 million. XF-73 nasal is wholly owned by Destiny Pharma and addresses a larger market so its value to the Company is expected to exceed that of NTCD-M3 once partnered. The fundraising has given us the platform to take XF-73 nasal to the next stage and we are very excited about this opportunity to deliver significant value for all shareholders."
More Deals
Aside from a deal on XF-73 nasal, Equity Development state, "Destiny has pencilled in a deal for M3 outside of North America and China in 2024".
They go on to say: "The cumulative milestone and royalty flows from both M3 and XF-73 deals could mean that, as things stand today, the March 2023 equity fundraising could have been Destiny’s last raise for the foreseeable future"
"Our fair value for Destiny Pharma plc has increased modestly to £251.9m or 267 pence per share."
You can read Equity Development's note on Destiny Pharma here
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