The Big Question for Affimed (AFMD) Is Whether Its Stock Can Keep Running
Can you feel the ground moving beneath your feet? Shares of Affimed (NASDAQ:AFMD) skyrocketed over 300% in the past two days after the drug maker announced that it has entered into a strategic collaboration agreement with Genentech, a member of the Roche Group, to develop and commercialize novel NK cell engager-based immunotherapeutics to treat multiple cancers. Affimed will receive an initial upfront payment of $96 million, with up to an additional $5 billion in milestone payments and royalties on future sales.
However, there’s not a lot of fuel left in the tank to propel the stock even higher, at least according to BMO Capital analyst Do Kim. While the analyst’s excited about the value the new collaboration provides, his price target of $5.00 reflects a potential downside of nearly 28% from current levels.
Kim opined, “In addition to reducing AFMD financing risk, we believe the Roche agreement provides big pharma validation and pipeline value for Affimed’s platform. We expect additional upside from AFM13 and AFM11 clinical updates in 2H18.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Do Kim has a yearly average return of 18.9% and a 59% success rate. Kim has a -17.3% average return when recommending AFMD, and is ranked #584 out of 4872 analysts.
According to TipRanks analytics, AFMD is a strong bullish favorite on the Street, with a unanimous Buy from all 3 analysts polled in the last 3 months. However, these analysts will have to decide rather to stay bullish and raise their price targets or move to the sidelines, as the stock’s consensus target price currently stands at $5.50 (20% downside).
Affimed engineers targeted immunotherapies, seeking to cure patients by harnessing the power of innate and adaptive immunity (NK and T cells). The company is developing single and combination therapies to treat cancers and other life-threatening diseases.