The drug candidate for severe COVID-19, sabizabulin, to which Valeo Pharma Inc. (VPH:TSX; VPHIF:OTCQB) owns the Canadian rights, was rejected by the U.S. Food and Drug Administration (FDA), allegedly due to questions about the main clinical trial, reported Research Capital Corp. analyst, Dr. Andre Uddin, in a November 10, 2022 research note.
As such, it is likely Health Canada will not approve sabizabulin for this indication either.
All is not lost for Valeo. However, Uddin noted, given its product portfolio.
"Despite this decision by the FDA panel," Uddin added, "we believe Valeo should have a hockey stick ramp in the next few years with the rollout of its new in-licensed products."
The FDA's vote was eight to five to not greenlight Veru Inc.'s drug candidate for hospitalized COVID patients with a high risk of developing acute respiratory distress syndrome, Uddin relayed.
"Despite this decision by the FDA panel," Uddin added, "we believe Valeo should have a hockey stick ramp in the next few years with the rollout of its new in-licensed products."
Accordingly, Research Capital lowered its 2023 revenue estimates on Valeo to CA$61.7 million (CA$61.7M) from CA$73M.
This compares to the Canadian specialty pharma firm's most recent guidance for 2023, of CA$63M.
The investment firm, though, maintained its Speculative Buy rating and CA$1 per share target price on Valeo, the stock of which is currently trading at about CA$0.28 per share.
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Disclosures For Research Capital Corp., Valeo Pharma Inc., November 10, 2022
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