It’s a big day for Arena Pharmaceuticals, Inc. (NASDAQ:ARNA). The drug maker released impressive results from its Phase 2 trial in Ulcerative Colitis (UC) that had many, even some of the biggest bears on the stock, commending the headway the company has made. As of this writing, Arena shares are soaring 26% to $39.15.
OK, then, so what now? According to Cantor analyst William Tanner, there is still over 60% upside for the stock. The analyst reiterates an Overweight rating on Arena shares, while raising his price target to $64 (from $45). (To watch Tanner’s track record, click here)
Tanner commented, “Pending release of additional data, we view the OASIS data as clean and compelling. With an interest in preserving the opportunity to present data at medical meetings, we understand why the entire top-line data set was not released. Clearly, from a material disclosure perspective, we believe it unlikely that significant wrinkles in the story will emerge with release of additional data.”
“In our view, the clean safety profile bodes well for expanding the use of etrasimod to other indications. For indications where T lymphocytes are not involved in the underlying pathology, we suppose etrasimod would not be useful. Given that many autoimmune and inflammatory diseases likely involve a T cell component, we believe the opportunity for other indications could be substantial,” the analyst added.
How does Tanner’s bullish bet weigh in against the Street? It appears the analyst is not the only one enthusiastic on this biotech firm’s prospects, with TipRanks analytics demonstrating ARIA as a Strong Buy. Out of 6 analysts polled in the last 3 months, all 6 are bullish on Arena stock. With a return potential of nearly 41%, the stock’s consensus target price stands at $58.50.