Genocea Biosciences Inc (NASDAQ:GNCA) shares were plummeting almost 15% yesterday after the biotech firm and are another 5% dive today after a lackluster second-quarter showing has left investors in a rage. Earnings for the quarter shortchanged expectations, and the GNCA team has its gaze on locking down further funds to bolster finance operations through the completion of Phase III studies evaluating therapeutic genital herpes (HSV-2) vaccine Gen-0003.

Cowen analyst Phil Nadeau nonetheless sees a “significantly undervalued” stock at hand, believing the genital herpes vaccine’s prospective peak sales could shatter $700 million.

Therefore, despite a hailstorm of negative investor sentiment shackling Genocea, the analyst reiterates an Outperform rating on the stock with a $40 price target, which represents an 873% increase from where the shares last closed. (To watch Nadeau’s track record, click here)

Finding the Phase II data read-out “intriguing” in the herpes indication, the analyst highlights, “GEN-003 has produced positive Phase IIb data in the treatment of genital herpes and will be ready for Phase III development by YE:17. ”

“Therefore, the fact that GEN-003 was able to hit this endpoint in Phase II provides strong proof-of-concept, and helps to de-risk the Phase III program. We are optimistic that GEN-003 will succeed in Phase III, and think that it addresses a significant commercial opportunity. The CDC estimates that 16% of the U.S. population aged >14 has been infected with HSV-2 and that 20-25% of infected people are aware of their status. This implies that GEN-003 could address a market opportunity of 8MM – 11MM people in the U.S. alone. Assuming a price of $300 per course, GEN-003’s total addressable market would be $2B+,” Nadeau contends.

For the second quarter, GNCA reported a net loss of $15.4 million, far higher than the analyst’s projection looking for a loss of $13.6 million, closing the quarter out with $35.2 million in cash. Genocea faces an outstanding debt towering at $17.2 million, but management anticipates the cash balance can fuel operations through the first quarter of 2018, which includes the completed prep work for GEN-003’s Phase III program.

TipRanks analytics demonstrate GNCA as a Buy. Based on 2 analysts polled by TipRanks in the last 3 months, both are bullish on Genocea stock. The 12-month average price target stands at $26.00, marking a nearly 533% upside from where the stock is currently trading.