(MENAFN- Investors Ideas) November 7, 2017 (Investorideas.com Newswire) Analyst Ed Arce discussed the rationale behind H.C. Wainwright & Co.'s decision to revise its models on this clinical-stage biopharmaceutical company.
H.C. Wainwright & Co. raised its target price on to $20 from $18 per share, "representing a $733M market cap," wrote analyst Ed Arce in a Nov. 1 research report.
Arce presented two primary reasons for the increase: the biotech's shares are "substantially undervalued" and data readout of the company's LEAP 2 trial, expected in spring of 2018, has been "significantly derisked," he noted.
Nabriva's Phase 3 LEAP 1 trial of lefamulin for community-acquired bacterial pneumonia (CABP) "met the primary efficacy endpoints for the U.S. Food and Drug Administration and the European Medicines Agency," Arce explained. C. difficile did not occur in either treatment arm. The incidence of diarrhea with lefamulin was "significantly lower than comparator moxifloxacin plus linezolid (0.7% versus 7.7%)."
After an initial spike in the stock upon the release of these positive data, the company's shares "have seen a steady slide down to current levels, nearly 11% below where they stood before LEAP 1 results, representing an enterprise value of less than $100M," Arce indicated.
The analyst outlined four reasons why Nabriva's stock should be higher in light of the favorable LEAP 1 trial results.
1. Lefamulin, the biologic tested in LEAP 1, "represents a novel mechanism of action with robust activity against all the key pneumonia-causing pathogens, as well as, importantly, methicillin-resistant Staphylococcus," Arce wrote.
2. In the United States, 5-6 million people contract CABP per year, and, Arce said, it's the "leading cause of death due to infection."
3. A major cause of the mortality rate from CABP is "the growing antibiotic resistance of currently available therapies, and their poor tolerability and adverse events profiles," Arce argued. About 15% of patients admitted with CABP don't survive. The rate is higher, 25–30%, for patients who wind up in an intensive care unit.
4. Treatment with lefamulin is shorter in duration than that with other available treatments, added Arce, requiring five to seven days of intravenous-to-oral monotherapy for most CABP patients.
H.C. Wainwright updated its models on Nabriva to reflect the positive LEAP 1 results and the recent $80 million equity raise, said Arce. Specifically, the financial institution increased its "point of sale for lefamulin to 87% from 55%." It raised the share count to 36.6 million from 26.8 million. Lastly, it updated expenses anticipated this year and next.
H.C. Wainwright has a Buy rating on Nabriva. The new $20 target price on this biotech compares to where its stock is currently trading, at $6.06 per share.
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following company mentioned in this article is a sponsor of Streetwise Reports: None. Streetwise Reports does not accept stock in exchange for its services. Click for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.
BiotechIndustryStocks.com - investing ideas in biotechnology stocks, medical technology and life sciences Like Biotech Stocks? View our
More Info: This news is published on the Investorideas.com Newswire - a global digital news source for investors and business leaders
Disclaimer/Disclosure: Investorideas.com is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investment involves risk and possible loss of investment. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Contact each company directly regarding content and press release questions. Disclosure is posted for each compensated news release, content published /created if required but otherwise the news was not compensated for and was published for the sole interest of our readers and followers. More disclaimer info:
Additional info regarding BC Residents and global Investors: Effective September 15 2008 - all BC investors should review all OTC and Pink sheet listed companies for adherence in new disclosure filings and filing appropriate documents with Sedar. Read for more info: . Global investors must adhere to regulations of each country.
Legal Disclaimer: MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.