Biotech Beat: Piper Jaffray Bullish on bluebird bio Inc (BLUE) and Regenxbio Inc (RGNX)

Analyst Joshua Schimmer of Piper Jaffray weighed in on bluebird bio Inc (NASDAQ:BLUE) and Regenxbio Inc (NASDAQ:RGNX) today to kick off the year. The analyst is bullish on both companies due to expected treatment and pipeline success.

bluebird bio Inc

Schimmer reiterated an Overweight rating on bluebird bio but lowered his price target to $125 (from $204). After looking back on the company’s year in 2015, the analyst maintains a positive stance on bluebird yet cites challenges faced by the company in the past 12 months. The analyst mentions that the company “is struggling to find its communication footing” after candidate LentiGlobin, used to treat sickle cell disease, was not as effective as hoped, which worried investors. However, he states that “the company is taking the right steps to optimize this product,” expecting these changes in the second half of 2016. Once implemented, the analyst believes the drug should work as intended and will “shape investor sentiment” and “create substantial value over time.”

While the analyst remains bullish on the company, he credits “competitive dynamics and challenges” for his slashing his price target. However, he states that his current price target still marks an upside from current levels, as the hemoglobin market “is big enough to accommodate all.” Going forward, the analyst expects an increase in share prices as a result of LentiGlobin improvements.

According to TipRanks‘ statistics, out of the 12 analysts who have rated the company in the last 3 months, 8 gave a Buy rating while 4 remain on the sidelines. The average 12-month price target for the stock is $114, marking an 80% upside from where shares last closed.

BLUE Consensus

Regenxbio Inc

Schimmer also weighed in on RGNX today, reiterating his Overweight rating for the company with a $36 price target. The analyst cited general gene therapy success in 2015 and predicts more programs in 2016 with FDA approvals. The analyst is bullish on the company going forward as its pipeline continues to progress, with expected updates in the middle of the year. He was particularly upbeat regarding RGX-314, designed to treat wet age-related macular degeneration, after data for AVA-101, a competing candidate from Avalanche Biotechnologies , changed its manufacturing after it experienced negative changes between its phase 1 and phase 2 data. As a result, the analyst believes the drug is “a suitable disease for gene therapy.” He also believes the company will “expand its preclinical stage pipeline” this year.

The analyst is also bullish regarding the company’s NAV vector licensees of 2015, expecting a minimum of two IPO’s this year. Schimmer believes Avexix, one of the company’s licensees, will issue a gene therapy trial update in the first quarter of this year. With these updates, as well as future reported data from its competitors, “RGNX remains at the center of the rapidly expanding universe of gene therapy.”

According to TipRanks‘ statistics, 2 analysts rated the company in the last 3 months with a Buy rating. The average 12-month price target between these two analysts is $35.50, marking a 108% upside from where shares last closed.


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