LONDON (ShareCast) - Panmure Gordon has hiked its target price for AIM-listed medical devices company Tissue Regenix (TRX) by over a fifth after the signing of new sales distribution agreements in the US, highlighting the possibility that the firm could become a bid target in the future.

The firm said on Thursday that it has signed seven independent regional sales distribution agreements in the US. The regional distributors represent 40 new sales representatives who will promote DermaPure, TRX's dCELL human dermis product.

Panmure analyst Savvas Neophytou labelled it as "terrific news" and "serves as a reminder that this company is on the cusp of exploding in a commercial sense".

TRX said that DermaPure remains on course for its commercial launch in the US in the first three months of 2014.

Neophytou explained that TRX is a regenerative medicine company, operating in a industry which is currently attracting a lot of interest from major players in the market. He said: "Its platform is relatively de-risked in that it utilises a low-tech method of tissue engineering which should allow faster access to market than more hi-tech approaches like stem-cell migration etc."

The broker maintained its 'buy' stance on the stock.

"Ultimately, we see the company becoming a bid target if its technology platform becomes successfully commercialised. It has multiple shots at goal and a strong balance sheet to execute its strategy.

"Looking at near neighbour’s Tissue Science Laboratory trade sale (with an overlap these days in some of its employees) and Advanced BioHealing, we conclude Tissue Regenix will also likely be a trade sale of anything up to $325m by 2020 (or 22p per share in today’s money). Therefore, we remain buyers and re-set our price target at 22p (from 18p previously).

The shares were up 14.82% at 19.95p by 10:49, extending the year-to-date rise to 60%.

BC

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE