Analyst Swayampakula Ramakanth of H.C. Wainwright gave his insights on the recent agreement between Advaxis, Inc. (NASDAQ:ADXS) and Amgen, Inc. (NASDAQ:AMGN). Yesterday, these two companies came to an agreement to license the worldwide commercial rights for ADXS-NEO, a personalized cancer therapy. The details of the agreement include Advaxis receiving $40 million up front, an investment of $25 million in common stock and up to $475 million in development and commercialization milestones.
The two companies will develop the therapy together with a joint steering commitment. Amgen is anticipated to fund the development and commercialization. The analyst feels that this agreement is advantageous to Advaxis because Amgen has the capabilities and experience to successful bring ADXS-NEO to market. Ramakanth thinks that ADXS-NEO “could be used synergistically” with Amgen’s various products. The companies have yet to announced development plans, but the analyst hopeful that, “the combination of Amgen’s resources and Advaxis’ scientific expertise could help propel ADXS-NEO to become a leading personalized immunotherapy in the future.”
Ramakanth feels that the new agreement with Amgen could “bring about a realignment of the market’s perception of Advaxis’ Lm-LLO vaccine platform. Up until now, Advaxis’ lack of commercial agreements with major companies affected its market perception. The agreement with Amgen now brings validation to Advaxis and its products that it didn’t have before.
Advaxis has formed clinical trail partnerships with large companies before to develop other Lm-LLO products while still maintaining full commercial rights to these products. Expectations are that Advaxis will report results from studies related to these drugs by the end of 2016. If the results are positive, the analyst thinks that it “could be significant catalyst for the stock and spur new commercialization deals as well.”
The analyst maintained a Buy rating on ADXS, with a price target of $23, marking a 108% increase from current levels.
As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, Ramakanth has a yearly average loss of 12.2% and a 35% success rate. The analyst has a 5.6% average loss when recommending ADXS, and is ranked #3,929 out of 4,071 analysts.
TipRanks shows that out of the 4 analysts who rated ADXS in the last 3 months, all 4 have given it a Buy rating. The average 12-month price target for the stock is $22.50, marking a 103.07% upside from current levels.
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