Feeling GUD: Raymond James raises price target on Knight Therapeutics

Raymond James analyst Rahul Sarugaser is feeling GUD about Knight Therapeutics (Knight Therapeutics Stock Quote, Chart, News, Analysts, Financials TSX:GUD).

On February 29, GUD announced that its Brazilian affiliate United Medical Ltda. had launched its lymphoma treatment, Minjuvi.

“In line with Knight’s commitment to advancing health care in Latin America, we are excited to launch Minjuvi in Brazil, an innovative treatment option for addressing a current unmet medical need,” said CEO Samira Sakhia.

The analyst says there are many reasons to like GUD right now.

“On the occasion of its 10th anniversary, GUD reviewed its evolution (see also our IOC) and provided key updates, including a higher peak sales estimate for its Innovated Product pipeline portfolio: >$120 mln (was $70-100 mln). GUD also announced the launch of Minjuvi—a 2nd line treatment for transplantation-ineligible DLBCL patients—in Brazil, which we expect to add ~$20 mln to peak pipeline sales (incl. in updated guidance),” Sarugaser said.

In a research update to clients March 6, Sarugaser maintained his “Outperform 2” rating on GUD, but raised his price target on the stock from $7.00 to $7.50.

The analyst thinks GUD will post EBITDA of $60-million on revenue of $336-million in fiscal 2023. He expects those numbers will improve to EBITDA of $61-milion on a topline of $340-million the following year.

“We anticipate this momentum will impel increases in the rate and scale of GUD’s business development activity, and, thus, revenue in the near- to medium-term,” Sarugaser concluded. “While we expect there is more infrastructure build-out required to sufficiently scale GUD’s LATAM operations, we believe the addition of new products to this marketing platform will quickly enhance GUD’s operating leverage, continuing to expand GUD’s bottom line.