H.C. Wainwright Initiates Buy On Epizyme; Sees 30% Upside For Stock

In a research note released this morning, H.C. Wainwright analyst Andrew Fein initiated coverage on Epizyme Inc. (EPZM). He issued a Buy rating with a $40 price target, which represents a potential upside of 30% from where the stock is currently trading.

The following bullets contain some highlights from that call:

  • While the focus of biotech investors and big pharma continues to roll over from genetics into epigenetics, EZPM represents a platform play in personalized epigenetically-targeted therapies, as a ~$1B company with ~$240M cash in hand (expected to fund operations into 2016), two rolling clinical programs with data in 2H14, and a proprietary HMT pipeline partly validated by pharma partnerships.
  • We believe that EPZM shares will perform well in next six months as preclinical and mechanistic updates first grab and then focus investor attention in anticipation of value-driving clinical data from EPZ-5676 and EPZ-6438, two small-molecule inhibitors of histone methyltransferases (HMTs), as personalized therapies in genetic subgroups of AML/ALL leukemias and NHL, respectively. In our view, the next inflection point in shares may come as early as mid-August, when the company presents preclinical work on EZH2 inhibition at the ASH Meeting on Lymphoma Biology (Aug 10-13, Colorado), which may be complemented with value-driving clinical observations from the ongoing EZH2 Phase 1/2.
  • The near-term progress with the clinical leads may also serve as further validation of the HMT technology platform, leading to new indications and/or business development activity.

According to TipRanks.com, which measures analysts and bloggers success rate based on how their calls perform, analyst Andrew Fein currently has a one-year average return of 9.2% and an 79% success rate. Fein is ranked #1148 out of 3215 analysts.

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