Analyst Sees 245% Upside for SCYNEXIS (SCYX) Stock; Here’s Why

It can be tricky putting a rating and price tag on a biotech company, especially one that offers no profits but promises of big success one day in the future. Case in point: Maxim analyst Jason McCarthy initiates coverage on shares of SCYNEXIS (NASDAQ:SCYX) with a Buy rating and price target of $6.00, which implies an upside of 245% from current levels. (To watch McCarthy’s track record, click here)

McCarthy sees opportunity for SCYX investors as its current valuation is only $80 million, and SCY-078, the Company’s lead clinical development candidate, is a novel antifungal in an era of rising infections, high mortality rates and resistance to available antifungals.

McCarthy wrote, “Path to approval, we believe catalysts lay ahead that should drive a higher valuation. VVC is the most advanced indication with the oral tablet of SCY-078 in a P2b dose finding trial vs. fluconazole, data 3Q18. Based on the prior P2 study vs. fluconazole, we believe the probability of success (comparable to flu) favors SCY-078. A P3 study, first in acute VVC in 4Q18 (vs. placebo), followed by recurrent VVC in 2020 (vs. placebo) would follow, data in 2021, respectively […] With an average price for a course of SCY-078 of ~$1,000 (higher in recurrent VVC vs. acute VVC), 5% of these markets (~75K-100K patients of the combined >2M patients) is a $100M opportunity, a conservative estimate in our view, and this doesn’t factor in IFIs. Considering 3x-5x revenue to be “fair value”, we see an undervalued company at $80M today with catalysts ahead to drive a higher valuation.”

Wall Street tends to agree with the McCarthy’s confidence on the tiny drug maker, considering TipRanks analytics reveal SCYX as a Strong Buy. Out of 5 analysts polled in the last 3 months, 4 are bullish on SCYNEXIS stock, while 1 remains sidelined. With a return potential of nearly 294%, the stock’s consensus target price stands at $6.50.


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