Stocks’ Details
 

Paradigm Biopharmaceuticals Limited

Successful Clinical Trial of Ross River Phase 2A: Paradigm Biopharmaceuticals Limited (ASX: PAR) is focused towards repurposing the drug, pentosan polysulphate sodium, for the lead clinical indication of bone marrow edema. The market capitalisation of the company stood at ~A$246.99 Mn as on 26^th June 2019. Recently, the company, via a release, stated that primary end point had been met in Paradigm’s Phase 2a randomised, double-blinded placebo-controlled clinical trial in participants with Ross River virus (or RRV).The secondary end points demonstrated injectable pentosan polysulfate sodium (iPPS) reduced RRV disease symptoms compared to placebo. At three months follow-up 72.7% of subjects in the iPPS group represented near remission of symptoms based on Rapid-3 disease assessment in contrast to 14.3% in the placebo group. The hand grip strength which measures the maximum isometric strength of the hand and forearm muscles using handgrip dynamometer showed clinically and statistically significant improvements from baseline throughout the study from Day 15 to Day 81.

Hand Grip Strength (Source: Company Reports)
 
Recently, the company has also reported more than fifty percent reduction in pain throughout 205 patients with knee osteoarthritis.It was also mentioned that combining the results of 22 patients with the previously reported 183 patients brings the average reduction in pain scores to 51.3% across a total of 205 patients. The results from 205 patients give important Real-World Evidence. The Real-World Evidence gives important safety and efficacy data of the drug when used in everyday clinical practice and it would support the company’s Phase 3 clinical trial.
 
What to Expect: As per the annual report, the company would continue to outsource its R&D to world-class research laboratories and CRO’s. The key financial ratios of the company witnessed a good improvement on a YoY basis. PAR is aiming to obtain fast?track designation and to commence a phase 3 trial in CY2019 in the US, and it is expected that both these initiatives would attract significant big pharma interest.
 
Stock Recommendation: The current ratio of the company stood at 9.20x against the industry median of 4.55x. This implies that the company is in a sound position to address its short-term obligation in comparison to the broader industry. On the stock’s performance front, it had generated a return of 34.26% and 110.53% in the time span of six months and one year, respectively. On the flip side, it produced a negative return of 13.15% in the time period of three months. Hence, considering the above-stated facts and current trading level, we give a “Speculative Buy” recommendation on the stock at the current market price of A$1.270 per share (down 1.167% on 26^th June 2019).
 

Paragon Care Limited

Change in Substantial Holding: Paragon Care Limited (ASX: PGC) provides end to end healthcare solution, which includes equipment and service solutions for acute, aged and primary care. The market capitalisation of the company stood at ~A$140.22Mn as on 26^th June 2019. Recently, First Samuel Limited has increased its voting power to 14.15% from 12.53% on 5^th June 2019. The company’s transformation programme is well advanced and building momentum with material progress being made throughout three key areas of the programme which includes single operational IT platform, whole-of-business cost out programme and divestment of legacy capital equipment business.

In 1H FY19, it posted EBITDA of $9.5Mn, which reflects high inherited cost base, and costs which are associated with divestment and acquisition integration synergy delays.

EBITDA Position in 1H FY19 (Source: Company Reports)
Future Aspects: The company continues to reflect strong organic growth from its continuing business. The company is expecting revenues and EBITDA of $240Mn and $28Mn in FY19, respectively. In addition, the overall group result difference would be driven by the divestment activities. The Eye Care division of the business has witnessed sales growth in excess of 15% this quarter against the previous corresponding quarter in FY17.

Stock Recommendation: PGC is obtaining good progress on leveraging the greater breadth of its product platform in order to deepen customer relationships and expand its market share. The net margin of the company stood at 4.3% against the industry median of 2.2%, which represents that the company is efficient in converting its topline into the bottom line in comparison to the broader industry. With respect to stock’s past performance, it had generated a negative return of 5.75% and 32.79% in the time span of three months and six months, respectively. Based on the foregoing and looking at the stock performance over the past few months, we give a “Speculative Buy” recommendation on the stock at the current market price of A$0.420 per share (up 1.205% on 26^th June 2019).
 
 

Immutep Limited

Active Immunotherapy PAClitaxel (AIPAC) Clinical Trial: Immutep Limited (ASX: IMM) is a biotechnology and medical research company. The market capitalisation of the company stood at ~$88.1 Mn as on 26^th June 2019. Recently, the company, via release, stated that enrolment of patient of AIPAC Phase IIb Clinical Trial in Metastatic Breast Cancer has been completed. The AIPAC study has been enrolled with 226 patients of metastatic breast cancer. The combination of eftilagimod alpha, which is an antigen presenting cell activator, administered in combination with chemotherapy is designed to boost the T-cell immune responses against tumours.

In the quarter ending March 2019, the net cash used in the operating activities stood at A$4.42Mn. During the quarter, it made payments for research and development of A$3.35Mn.


Cash Flow Statement (Source: Company Reports)

Future Prospects: IMM is expecting to report multiple clinical news flow items and milestones in FY19 and beyond. It is focused on the continuous expansion of patent portfolio along with regulatory interactions. The company is continuously developing its business activities.

Stock Recommendation: The current ratio of the company stood at 7.34x in 1H FY19 against the industry median of 4.55x, which showcases the company’s sound position to address its short-term obligations in comparison to the broader industry. When it comes to the stock’s past performance, it had produced a negative return of -27.78% in the span of previous three months, while in the past one month, the stock’s return was -7.14%. Currently, the stock is trading at 52-weeks lower level of $0.025. Hence, we put our watch stance on the stock at the current market price of $0.025 and suggesting that investor should wait for few more catalysts to the drive the stock.


Comparative Price Chart (Source: Thomson Reuters)      

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