In a research report published Wednesday, Wedbush analyst Liana Moussatos downgraded shares of Vitae Pharmaceuticals Inc (NASDAQ:VTAE) from Outperform to Neutral, while reducing the price target to $21 (from $23) to reflect the acquisition proposal by Allergan at what now equates to $21.00/share or $639 million in cash – a premium of 159% to VTAE’s September 13 closing price of $8.10 or $238 million.
Moussatos commented, “We believe the acquisition price reflects Allergan’s confidence in the blockbuster potential for both VTP-43742 for autoimmune diseases, VTP- 38543 for atopic dermatitis, and the Contour drug discovery platform. In March 2016, Vitae announced positive results from its Phase 2 proof-of-concept trial for VTP-43742, a RAR-Related Orphan Receptor γ-t (RORγt) inhibitor, in moderate to severe psoriasis patients. After only four weeks of treatment with VTP- 43742, a statistically significant and clinically meaningful reduction in total Psoriasis Area Severity Index (PASI) score from baseline was observed. We noted that the results were favorable when compared to historical 4-week PASI reduction results for currently approved products.”
As usual, we like to include the analyst’s trackrecord when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Liana Moussatos has a yearly average return of 6.9% and a 38.4% success rate. Moussatos has a -10.2% average return when recommending VTAE, and is ranked #484 out of 4163 analysts.
As of this writing, all the 5 analysts polled by TipRanks rate Vitae Pharmaceuticals stock a Buy. With a downside potential of 9%, the stock’s consensus target price stands at $19.00.