Roth Capital Maintains Buy On RedHill, Boosts Price Target To $24


In a research note issued this morning, Roth Capital analyst Scott Henry maintained a Buy rating on RedHill Biopharma (RDHL) and raised his price target to $24.00 (from $20.00), as a result of the recently in-licensed Mesupron asset, and multiple looming pipeline catalysts in the next 12 months.

Henry comments: “The company recently in-licensed Mesupron (from Wilex AG) – a potential oncology treatment (uPA inhibitor) for GI related solid tumors. This compound targets markets with billion dollar revenue potential including treatments for pancreatic, gastric, colorectal, and breast cancers. We expect Mesupron to enter phase 2b or 3 clinical studies in 2015. We further added a $1 million milestone payment to our 3Q14 forecast as a result of this transaction”.

Henry continued, “The anchor pipeline program (RHB-104 for the treatment of Crohn’s) continues to progress with greater numbers of clinical sites enrolling. We target pivotal data in late 2015/early 2016, but expect enrollment updates and potentially a futility analysis in the nearer term”.

As a result, the analyst is increasing his price target from $20 to $24/share. This reflects increases to the RHB-104 asset (from $12.50/share to $15.00) as a result of a shorter discount period, and increasedvalue for the rest of the pipeline (from $0.50/share to $2.00) as a result ofthe recently in-licensed Mesupron asset.

According to TipRanks.com, analyst Scott Henry currently has an average return of 35% and a 44% success rate. Henry is ranked #210 out of 3163 analysts.

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