Oppenheimer Slashes Price Target on Eiger Biopharmaceuticals Inc (EIGR) Following Clinical Failure in PAH, But Remains Bullish

The company's future is in serious doubt, but it doesn't prevent Oppenheimer's Jay Olson from hitting the 'buy' button.


Small biotech stocks are often considered as “binary” lottery-ticket, with either a small chance of big upside, or a greater probability of nothing at all. These stocks can soar to heights of euphoria and crash to depths of depression. Case in point: Eiger Biopharmaceuticals Inc (NASDAQ:EIGR) lost half of its value today, following the news that the company’s product candidate ubenimex failed to meet the primary endpoint of pulmonary vascular resistance (PVR) in pulmonary arterial hypertension (PAH) in a phase 2 trial.

In reaction, Oppenheimer analyst Jay Olson slashed his price target on EIGR from $34 to $26, but stuck to his Outperform rating on the stock as his new price goal remains about 220% above current levels.

Olson noted, “Based on the PAH failure, we remove $8/share for ubenimex, which we had modeled with annual sales of $438M in 2026 assuming a 19% probability of success. Our new $26 price target still includes $7/share from ubenimex in lymphedema with a 19% probability of approval in 2020.”

“Other catalysts in 2018: Beyond the Ph2 data from ubenimex in lymphedema in 3Q18, we can expect Exendin (9-39) 28-day Ph2 study data from the PREVENT trial in 3Q18. In February, we expect to receive details on the EOP2 meeting with the FDA to discuss registration pathway in HDV,” the analyst concluded.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Jay Olson has a yearly average return of 3.4% and a 45.5% success rate. Olson has a 55.6% average return when recommending EIGR, and is ranked #1925 out of 4745 analysts.

How does Olson’s bullish forecast echo against the word of the Street? Quite positively, it seems, as TipRanks analytics exhibit EIGR as a Strong Buy. Out of 6 analysts polled in the last 12 months, all 6 rate a Buy on Eiger stock The 12-month average price target stands at $28.33, marking a nearly 250% upside from where the stock is currently trading.

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