Cipher Pharmaceuticals Inc.

Cipher Pharmaceuticals Inc. is a growing specialty company with a focus on dermatology. The company's goal is to develop and acquire best-in-class skincare solutions for unmet medical needs. Cipher has everything it takes—strong financials, a robust and growing product portfolio and savvy executive leadership with proven commercial execution capabilities—to change the face of dermatology treatment for patients and healthcare professionals throughout North America.

Expert Comments:

"Cipher Pharmaceuticals Inc. is a specialty pharmaceutical, and its specialty niche is dermatology. The company has had a tough year, and that's a function of the market trying to figure out where its growth will come from and what its strategy is. . .Cipher does have cash flow, and it has been growing. That's a positive, and it's something we are certainly interested in, especially given where the stock is now compared to where it has been. When you look at the valuation here, compared to its peers, it's trading in a fairly reasonable range, less than 10 times enterprise value:EBITDA. A lot of its comparables are at 10–11 times. We have Cipher on our radar screen. . .I think Cipher's gotten down to a valuation level and oversold enough that people are digging around, looking. In the Canadian markets, up until Dec. 23, we were seeing tax-loss selling continue to come in. Cipher was down on the year. Rolling into the new year, we started to see some of that wane, and the stock had a bit of a move from the middle of December right to the end of the year. Then it basically stuck in pretty well this year, during a time when a lot of its peers have been beaten up." read more >

Douglas Loe, Euro Pacific Canada (1/22/16)
"We are identifying Cipher Pharmaceuticals Inc. as one of our 2016 Top Picks. . .we are of course maintaining our Buy rating and $13.25 price target on the company. . .at current levels, our price target corresponds to a one-year return of 233.8%."

"Cipher Pharmaceuticals Inc. is traded on the Toronto Stock Exchange but also trades on the NASDAQ, and it has gotten some attention from investment banks in the U.S. over the past couple months. The company sells a number of dermatology and other products, and hopes to bring in $200M or more in revenue within a few short years. It has a set of products selling now in Canada, and others that are going through regulatory review. It has another set in the U.S. There are many products in its pipeline and portfolio. The company is generating revenue from these products. Cipher is trying to build a good margin, and with each slate of acquisitions, I get a sense it is trying to get larger products that will bring a higher gross margin to the income statement. The next set of products it will focus on is for skin problems associated with severe psoriasis, lupus and melanoma. It is trying to move up the margin chain as it acquires new products. . .the company is moving in the right direction. . .moving products through the regulatory review process in Canada is ongoing. As each product gets approved for sale, it's an incremental uptick for the company. It's going to develop the capacity to do what a few other acquisitive companies have done with this type of business model. Cipher is a long-term story for value investors as the company improves its revenue and margins. There's also the possibility that the company will put its small-product line up for acquisition as it decides to go to a larger product market. The bottom line is that this story is not completely written yet. Whichever way it goes, Cipher is an interesting position. " read more >

"There is no denying that Cipher's market value has been challenged in recent months, even though share value has encouragingly stabilized. . .much of the stock's recent softness seems to be market-wide, but it is undeniably true that Cipher's stock sustained huge downdrafts in the Q4/14 to Q1/15 period. . .we suspect that investors are still reflecting on how to value Cipher's lead dermatology drug Absorica now that royalty revenue derived from this drug, while substantial at US$4.5M-5M per quarter and well above our original expectations, is not growing anymore, nor do we expect it to. Second, investors are undoubtedly reflecting on the value of an acquisition Cipher consummated in Q2/15, a dermatology-focused revenue-positive firm called Innocutis. . .we see more opportunities than challenges. First of all, it is not negative in our view that Absorica generates such strong royalty revenue, even if it is not growing, because it provides substantial nondilutive capital that Cipher can redeploy into acquiring new commercial dermatology assets. . .also, we believe investors are undervaluing the magnitude to which achievable Absorica royalties were derisked by a settlement with Allergan last quarter, with both parties agreeing that Allergan will not launch its generic Absorica formulation until Q4/20. Cipher's patent strength was strong, and did not expire until September 2021, but we believe giving away three quarters of branded exclusivity in exchange for making the uncertainty of generic launch timelines go away was a fair trade. . ." read more >

Douglas Loe, Euro Pacific Canada (12/7/15)
"Cipher Pharmaceuticals Inc. received Canadian approval for its topical betamethasone-hyaluronic acid patch formulation Beteflam, with the company poised to launch this plaque psoriasis therapy with its existing Canadian dermatology sales team by Q2/16. . .we see no reason why Canadian Beteflam sales could not exceed $1M next year and approach $2-$3M in FY/17. . .we certainly endorse the strategy of building out a Canadian commercial dermatology portfolio one product at a time."

Prakash Gowd, CIBC World Markets (11/30/15)
"As of Nov. 29, we are initiating coverage of Cipher Pharmaceuticals Inc. with a Sector Outperformer rating and a 12- to 18-month price target of $6.20. . .the company is focused on building a sustainable growth, customer-centric dermatology business predicated on organic growth through targeted sales and marketing of differentiated products, efficient clinical development directed at late-stage research and development and supplementation with future acquisitions."

Management Q&A: View From the Top
Shawn Patrick O'Brien
Shawn Patrick O'Brien, president and CEO of Cipher Pharmaceuticals, describes his company's ongoing efforts to address unmet needs in dermatology.
read more >

More Expert Comments

Experts Following This Company

Bruce Campbell, Founder and Portfolio Manager – Stonecastle Investment Management
Prakash Gowd – CIBC World Markets
Humberto Leon, Analyst – Kallpa Securities S.A.B.
Alan Leong, CEO – BioWatch News
Douglas Loe, Analyst – Euro Pacific Canada
Eden Rahim, Portfolio Manager and Options Strategist – Next Edge Capital, Theta Strategies Capital
Grant Zeng, Senior Biotech Analyst – Zacks Investment Research, Zacks Small-Cap Research

The information provided above is from analysts, newsletters and other contributors. Please contact the company and visit its website before making an investment decision.