Investors with a high tolerance for risk might want to take a look at the speculative ASX stock in this article.
That's because if analysts at Bell Potter are to be believed, its shares could more than double in value over the next 12 months.
Which speculative ASX stock?
The stock in question is Clarity Pharmaceuticals Ltd (ASX: CU6).
It is a radiopharmaceuticals company that specialises in the development of targeted copper theranostics (TCT) for the imaging and treatment of selected cancers. Bell Potter notes that radiopharmaceuticals is a well-established field of medicine and in recent years has experienced significant expansion thanks to the development of new technology.
What is the broker saying?
This week, this speculative ASX stock announced that it has signed a clinical manufacturing agreement with SpectronRX.
Together with other supply and manufacturing agreements, the company notes that this agreement substantially bolsters reliable, universal access to 64Cu-SAR-bisPSMA in the US for a commercial rollout upon the receipt of US Food and Drug Administration (FDA) New Drug Application (NDA) approval.
Bell Potter was pleased with the news. It commented:
Spectron expects to expand finished dose manufacturing capacity up to 400,000 patient ready doses of SAR-bisPSMA annually from its single production facility in Indiana by the time of commercialisation. In addition, Nusano will eventually produce sufficient 64Cu for up to 18,000 patient doses daily at capacity (potentially 3.6m doses annually).
Putting this in context, the annual PSMA PET market in the US today is estimated at ~300,000 scans and growing, while the market for neuroendocrine PET imaging may eventually exceed 100,000 scans annually. Accordingly, we believe the two 64Cu supply agreements are more than sufficient to meet long term demand.
Big return potential
According to the note, the broker has responded to the news by retaining its speculative buy rating and $4.90 price target on the stock.
Based on its current share price of $2.18, this implies potential upside of approximately 125% for investors over the next 12 months.
To put that into context, a $5,000 investment would grow to be worth $11,250 by this time next year if Bell Potter is on the money with its recommendation.
Commenting on its recommendation for this speculative ASX stock, the broker said:
No changes to earnings or valuation. CU6 has now established a multilayered and abundant supply of 64Cu capable of meeting prospective demand across multiple indications. We maintain our Buy (Spec) recommendation and Valuation $4.90.
