Analysguiden: Clear Focus on Increased Shareholder Value

| 8 juni, 2021 | 0 kommentarer

As expected, Redwood Pharma reported no sales during Q1, and the operating result was SEK -4.3 million. Analysguiden reiterate their SEK 14 target pricce.

Continued Development of RP101 and RP501

As expected, Redwood Pharma reported no sales during Q1, and the operating result was SEK -4.3 million (-4.4). In connection with the transfer of the company’s listing to Nasdaq First North, a successful rights issue was carried out which gave the company a cash position of SEK 28 million. To maximize the value of RP101 for dry eye disease (DED) in post-menopausal women, Redwood Pharma explores strategic alternatives with potential partners. The company has now officially established RP501 as a separate project for the treatment of milder forms of eye dryness based on the IntelliGel platform.

Significant Market for the Treatment of Dry Eyes

With 344 million people worldwide suffering from dry eyes, the market potential for Redwood Pharma’s ophthalmic drugs is high. RP101 for the treatment of DED in postmenopausal women is, after positive phase 2 results, well positioned for continued development in a pivotal phase 3 trial. In December 2020, US clinical contract research organization Ora, Inc. presented findings regarding RP101. RP101 showed a statistically significant effect on corneal damage, with a difference of 0.70 compared to the control group on day 90. This is interesting considering that Xiidra, to which Novartis recently acquired the rights in a deal worth up to USD 5.3 billion, showed an improvement of less than 0.10 after three months of treatment.

Potential For RP501 as a Non-Prescription Product

The company’s other program, RP501, is intended to treat milder forms of dry eye disease in a broader patient population consisting of both men and women. Since OTC products generally have a lower price point, the sales potential for RP501 is lower, at the level of USD 50 million per year. For the company, however, it has the advantage that it can be developed relatively quickly and reach the market to generate revenue within two to three years.

Reiterating Our SEK 14 Target Price

With positive clinical results, we see great potential in the company’s share price. We assume that a launch of RP101 will take place in 2025, and that the drug will reach sales of EUR 500 million. We reiterate our target price of SEK 14 for Redwood Pharma. In our bull scenario, we see the potential for a value of SEK 28 per share, and in our more pessimistic bear scenario, the corresponding figure is SEK 7 per share.


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