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Doug Landy is a former sell-side associate, pharmacy director, and pharmacist, with experience that includes investing and stock market analysis since 1995. Doug started his career in healthcare delivering prescriptions for a family owned pharmacy, has 10 years experience in hospital pharmacy,... More
  • Buy Rating for the 'COR'; Cormedix Gaining Attention:  0 comments
    Jun 3, 2010 11:50 AM

    Greetings Everyone!

    Buy Rating Initiated at Maxim!

    In a nice follow up to my recent positive blog on CorMedix Inc (NYSEMKT:CRMD), Maxim Group, LLC has initiated coverage of the company with a BUY rating and 12 month price target of $5.00 ($2.60 current price).

    The buy-rating and increased coverage should bring more investors into the name, over the next several months ,as clinical trials roll on.

    Cormedix offers two late stage drug opportunities with positive early stage data, relatively low clinical risk, in a ddition to a share count and market cap value that will allow for positive pps momentum.

    Keep an eye out for CRMD.

     

    Initiation                                                                           Buy

    CorMedix Inc.    

    (CRMD – AMEX – $2.60)

     

    Mid- and late-clinical-stage pipeline with encouraging data, unmet medical need, and substantial market potential; Initiating coverage with a Buy rating and $5 price target

     

    We are initiating coverage of CorMedix Inc. (CRMD) with a Buy rating and 12-month price target of $5.00.  CorMedix Inc. is a biopharmaceutical company with two leading developing products. The first, Neutrolin, is scheduled to commence a pivotal trial for its potential as a catheter lock solution for the prevention of central venous catheter infection in hemodialysis settings. The second, Deferiprone, should soon enter a Phase II study for the prevention of contrast-induced nephropathy (CIN) in high-risk patients.  Given its insufficient exposure to investors, we believe the stock’s current valuation is not inline with its potential upside. As such, we are recommending CRMD with a Buy rating and 12-month price target of $5.00 for risk-tolerant investors.

     

    Investment Thesis:

     

    Ø Promising early clinical results bode well for an upcoming pivotal study evaluating Neutrolin in CRBI prevention. Several earlier clinical studies exhibited antimicrobial activities vs. the current standard of care, and the addition of heparin boosted the anticoagulation activities of Neutrolin, which both bode well for the success of the upcoming Neutrolin Phase III study for catheter-related bloodstream infection (CRBI) prevention, in our opinion. We anticipate a pivotal Phase III trial to start in 1H11.

    Ø If positive, results from near-term Deferiprone Phase II study in CIN could be an important catalyst. With Deferiprone’s established iron-chelating capability and logical rationale that excess labile iron is a major pathological cause of contrast-induced nephropathy (CIN), we believe a potential positive outcome from the upcoming Phase II biomarker study could clinically validate and substantially increase this asset’s value. The Phase II proof of concept trial in CIN is scheduled to commence in 2Q10, with interim data by YE10 and complete results in 1H11.

    Ø Market potential for Neutrolin and Deferiprone is substantial.  Currently, there are not any approved drugs for the two indications that Neutrolin and Deferiprone address.  We estimate the U.S. peak market sales for CRBI prevention in hemodialysis and CIN could reach $250MM and $600MM, respectively.  As a potential first entrant into the market, the stock could realize substantial gains if the products receive approval.

    Ø An undervalued stock.  We believe CRMD shares are undervalued based on our comparable analysis of Phase II or III biopharmaceutical peers. We believe our 12-month target price of $5.00 per share would bring the total CorMedix value to $57MM – much more inline with its peer group’s average technology value of $50MM.

     

     

    On behalf of:
    Yale Jen, PhD

    Senior Biotechnology and China Healthcare Analyst

    Vice President

    212-895-3516

     

    Maxim Group LLC

    The Chrysler Building

    405 Lexington Avenue, 2nd FL

    New York, NY 10174

     



    Disclosure: No Positions
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