It’s one small step forward for Vascular Biogenics (VBLT), one giant leap for the company’s stock rating. H.C. Wainwright’s healthcare analyst Swayampakula Ramakanth upgrades VBLT stock from Neutral to Buy, while keeping his price target at $3.00, which implies over 100% upside potential from current levels. (To watch Ramakanth’s track record, click here)
While investors may have written Vascular off after the failure of the GLOBE study in March, 2018, Ramakanth believes that with the Phase 3 OVAL study on track to report an interim efficacy data readout in 4Q19 and recent weakness in the share price, VBLT warrants consideration.
Ramakanth stated, “In March, we downgraded VBL Therapeutics to Neutral from Buy due to the failure of the Phase 3 GLOBE study of VB-111 for the treatment of glioblastoma multiforme (GBM). At the time, we noted that despite the disappointment in GBM, we continued to see value in the company’s ovarian cancer program. However, we felt that the lack of near-term catalysts and meaningful development in the company’s other pipeline products precluded a Buy rating on the stock. Since then, the stock price has fallen by 46% despite no negative news from the company. We note that at this time, VBL’s stock price of $1.45 per share is trading below its book value of $2.01 per share and also below its cash value of $1.94 per share.”
“Furthermore, in August the company amended the ongoing Phase 3 OVAL study of VB-111 for the treatment of ovarian cancer to include an interim efficacy readout, which is expected to occur in 4Q19. Previously, results from OVAL were not expected until 2H21 at the earliest […] Taken together, we believe that the promising pipeline developments over the last six months, the weakness in the stock price, and the major clinical readout expected in 2019 has significantly increased the value proposition of VBLT.” the analyst added.
How does Ramakanth’s bullish bet weigh in against the Street? It appears the analyst is the only supporter of this drug maker’s prospects versus 3 analysts who remain sidelined. However (and that’s a big however), the stock’s consensus target price stands at $3.33, which represents a 133% jump from where the stock is currently trading. (See VBLT’s price targets and analyst ratings on TipRanks)