MLV Initiates Buy On Conatus, Sees 134% Upside For The Stock
In a research report published today, MLV analyst Vernon Bernardino initiated a coverage on shares of Conatus Pharma (NASDAQ:CNAT) with a Buy rating and a $16 price target, which represents a potential upside of 134% from where the stock is currently trading.
Bernardino wrote, “With the stock’s recent pullback in sympathy with other companies advancing drugs for liver diseases like non- alcoholic steatohepatitis (NASH), we believe CNAT is at prices attractive for entry in front of multiple catalysts that we anticipate will drive the stock up through YE15. We look for the American Association for the Study of Liver Diseases (AASLD) annual meeting, November 6-11, to provide critical exposure and recognition of biomarker data to be presented Nov. 10 on Conatus’ drug candidate, emricasan. We believe the Ph 1 data will be positive and confirm emricasan’s potential to benefit patients at risk of progressive liver damage and fibrosis. With potential 2018 approvals in acute-on-chronic liver failure and post-orthopic liver transplantation, diseases that we believe have >$1BN market potential, and blockbuster value in other chronic liver diseases, we believe Conatus will be in a long-term position to generate significant value.”
The analyst continued, “As emricasan targets the processes that lead to liver damage, which is correlated with an increase in serum levels of the biomarkers, cCK18 and ALT, the data to be presented at AASLD will be the first of many readouts through YE15, including POC data, that we believe will culminate in a decision to advance emricasan into pivotal studies in patients with acute-on-chronic liver failure (ACLF) and post-orthopic liver transplants (POLT). Thus, we view the data as fundamental to building a foundation for confirming emricasan’s potential to benefit critically ill chronic liver disease patients.” The analyst added, “We favor emricasan’s market potential in ACLF, and POLT in HCV patients that have unresolved fibrosis after SVR (POLT-HCV-SVR) over blockbuster opportunities in NASH and liver cirrhosis (LC), where the regulatory path to approval is not yet defined. As there are no approved therapies in ACLF and POLT, we believe emricasan can be the first mover, and with premium pricing, realize $797MM and $660MM in annual sales and growing 10% and 6% yr/yr, respectively, by 2024.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Vernon Bernardino has a total average return of -27.4% and a 0% success rate. Bernardino is ranked #3303 out of 3354 analysts.