J.P. Morgan Initiates Overweight on Karyopharm Therapeutics Inc; Sees 37% Upside For The Stock

In a research report issued today, J.P. Morgan analyst Whitney Ijem initiated coverage on shares of Karyopharm Therapeutics Inc (NASDAQ:KPTI) with an Overweight rating and price target of $20, which represents a potential upside of 37% from where the stock is currently trading.

Ijem wrote, “KPTI’s SINE platform represents a novel mechanism of action with potential for broad utility in oncology (and beyond). We believe selinexor’s unique mechanism of action will ultimately prove useful in several oncology indications (though we do think that combination regimens will ultimately be key for broader use). Our target is based on a blended average of our risk-adjusted NPV model (50%) and proprietary scenario analysis (50%). On a sum-of-the-parts basis, we assign ~$8/share to selinexor in the US (50% probability of success, which includes RT, DLBCL, AML, MM, and liposarcoma) and ~$1/share for the EU (50% probability of approval, assuming ex-US partnership), plus ~6/share for the pipeline and ~$5/share in estimated net cash at YE16.”

“KPTI ended 2Q15 with ~$256M in cash, and no debt. We estimate KPTI ends 2015 with ~$200M in cash, and the company believes current cash will be sufficient into 2018 (we assume an equity offering ahead of that to support commercial prep),” the analyst added.

All the 4 analysts polled by TipRanks rate Karyopharm Therapeutics stock a Buy. With a return potential of 2701%, the stock’s consensus target price stands at $54.25.

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