Cipher Prescription drugs is a purchase, this analyst says

Leede Monetary analyst Douglas Loe stated in an Oct. 14 replace that Cipher Prescription drugs (Cipher Inventory Quote, Chart, Information, Analysts, Financials TSX:CPH) obtained “a serious enhance” following a constructive arbitration ruling in opposition to its U.S. Absorica advertising and marketing associate Solar Pharma, eradicating a lingering threat to Cipher’s Epuris franchise in Canada and enhancing its monetary outlook.

Loe reiterated a “Purchase” score and $19.00 goal, saying the result “not solely affirms Epuris’ market management in Canada however offers supplemental stability sheet money and incremental royalty revenue.”

The arbitration centred on Solar’s launch of Absorica LD, an alternate isotretinoin formulation marketed in each the U.S. and Canada. Cipher argued that Solar improperly used Epuris-related medical information to help its Well being Canada utility, and arbitrators agreed.

The binding determination grants Cipher a US$3-million money award, a 15% royalty on Absorica LD internet gross sales, and reimbursement for many of its authorized bills, estimated at as much as US$2.0-million. Loe stated the mixed profit may add roughly US$5-million to Cipher’s stability sheet.

Cipher’s flagship product, Epuris, continues to dominate Canada’s isotretinoin market with a 51.3% market share and US$3.6-million in product sales for FQ2/25, outperforming competing manufacturers akin to Absorica LD, Clarus (Teva/Mylan), and Accutane (Cheplaspharm Schweiz).

“Solar’s Canadian launch of Absorica LD final 12 months has had little influence on Epuris’ income trajectory,” Loe wrote. “This determination underscores Epuris’ model energy and validates Cipher’s management within the Canadian dermatology market.”

Loe added that Cipher’s newly secured money offers “monetary flexibility for debt discount or new in-licensing alternatives.”

He additionally famous robust momentum from Natroba, Cipher’s lately acquired spinosyn-based remedy for head lice and scabies, which generated US$7.8-million in FQ2/25, up from US$5.5-million within the prior quarter. He expects continued progress from worldwide approvals and potential out-licensing agreements.

Leede’s valuation stays primarily based on the typical of 20× fiscal 2026 totally diluted EPS (US$0.71) and 12.5× fiscal 2026 Adjusted EBITDA (US$28.0-million), incorporating professional forma money of US$16.3-million (C$25.8-million) and long-term debt of US$25.0-million (C$35.1-million). Loe stated the inventory has risen greater than 1,100% since his protection started in early 2021, and his goal implies a 33% one-year return.

Loe stated that Cipher ought to do US$24.4-million in Adjusted EBITDA on income of US$52.2-million in fiscal 2025, enhancing to US$28.0-million on income of US$58.5-million in fiscal 2026.

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