Biopharmaceutical company Tetra Bio-Pharma (Tetra Bio-Pharma Stock Quote, Chart TSXV:TBP) has a potential turning point in its proposed clinical program to treat fibromyalgia, says analyst Rahul Sarugaser of Paradigm Capital. In a research update on Friday, Sarugaser reiterated his “Buy” rating and $1.75 price target.

Yesterday, the cannabinoid-based drug developer Tetra Bio-Pharma announced ethics board approval for its study of its vaporized PPP001 drug for the treatment of fibromyalgia, one of many cannabis based clinical trials in which the company is currently engaged.

Sarugaser says that along with procuring potential access to the fibromyalgia market (US$1.8 billion), the announcement further indicates TBP’s understanding of the high standard of data required to advance a candidate through regulatory authorities such as Health Canada, the US FDA or the EMA.

“While many cannabis companies with aspirations of developing clinical drug products commonly announce their intentions to pursue clinical trials, this pursuit has been the foundation of TBP’s operations from day one,” says Sarugaser. “The company has translated its clinical aspirations into rapidly advancing realities, with some of its proprietary agents already engaged in late-phase—Phase II, III, and IV—clinical trials, underscoring TBP’s field-leading research momentum and deep knowledge of Health Canada’s regulatory apparatus: key value drivers in the biopharmaceutical and clinical cannabis arena.”

The analyst also notes that BC-based cannabis company Tilray recently announced plans to co-develop cannabis-infused oral film products through a partnership with IntelGenx, the same group that TBP engaged to co-develp its slow release tablet PPP002 more than a year ago. Sarugaser says the Tilray announcement underscores TBP’s “forward=thinking approach” to cannabis bio-pharm.

“We see TBP’s clinical program in fibromyalgia as a potential value inflection point, but since the program is not yet initiated, we have not yet incorporated its value into our target price,” he says. “Also, we see Tilary engaging the same, gold-standard drug delivery technology developer as TBP as validating event, especially given the war chest Tilray has to deploy.”

Sarugaser expects Tetra Bio-Pharma to produce no revenue in 2018 and an EBITDA of negative $2.0 million. His $1.75 target price represents a projected return on investment of 56 per cent at the time of publication.