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UPDATE - Plethora Solutions eyeing US$1bn a year in sales

Last updated: 03:46 12 Mar 2014 AEDT, First published: 04:46 12 Mar 2014 AEDT

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Plethora Solutions (LON:PLE) shares soared on Tuesday as it reported positive progress in the USA for its lead product for premature ejaculation.

The firm's recent meeting with the United States Food and Drug Administration (FDA) has now "unambiguously defined the path" to a successful submission for making a drug application for PSD 502.

The AIM-listed company saw its shares jump 24% to 11.1p on the news.

The US is the world's biggest drug market and Plethora's internal modelling and input from its US marketing consultant means it now forecasts more than US$1 billion a year in peak prescription sales.

The firm said it is looking to unlock value as quickly as possible by bringing to a close negotiations with potential marketing partners for PSD 502.

“In this respect, the company has received several expressions of interest for out-licensing PSD 502 in the US, EU and other territories,” it said.

Negotiations are at a more advanced stage with a number of potential marketing partners.

“The company is also making excellent progress with its preferred manufacturing partner and is hopeful that an announcement will be made within the next month,” it added.

The shares have put on 550% since trading at just 2p a year ago amid funding issues.

Daniel Stewart lifted its target price on the stock from 18.9p to 25.6p on Tuesday, reducing its discount rate from 19% to 15% in its DCF (discounted cash flow) model now that the treatment is closer to being awarded US approval.

“We continue to see significant scope for reducing our conservative discount rate, and hence increasing our target price, as PSD502 further progresses through to US approval and commercial launch,” analyst Vadim Alexandre said.


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