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Canaccord Cheers Mast Therapeutics Inc (MSTX) In Light Of Strategic Merger With Savara


Mast Therapeutics Inc (NYSEMKT:MSTX) and privately held pharmaceutical firm Savara Inc. have announced the intent to merge to advance a novel pipeline of inhalation therapies. This alliance will extend in the following three indications: the community-acquired infection methicillin-resistant Staphylococcus aureus (MRSA) in cystic fibrosis, pulmonary alveolar proteinosis, and heart failure with preserved ejection fraction.

Canaccord analyst¬†John Newman¬†commends the merger as a “strategic” move on Mast’s part, explaining, “We believe the suite of three clinical inhaled assets makes sense from an R&D and clinical development perspective, providing strong synergy for MSTX shareholders.”

Additionally, the analyst highlights that the collaboration would entail a combined pipeline of three inhaled assets, AIR001, AeroVanc, and Molgradex. For Newman, this is crucial, as “AeroVanc and Molgradex both target diseases of the lung, where FDA has been willing to approve inhaled therapies. AIR001 is treating a serious, life-threatening disease, and therefore we believe FDA will carefully consider the inhaled formulation going forward.”

“Savara will become a publicly traded company on the NYSE-MKT exchange, and we await details regarding a potential reverse split in order to satisfy the market’s listing requirements. Canaccord Genuity Inc. is acting as financial advisor to Savara on the proposed transaction with Mast Therapeutics,” Newman concludes.

Pending the close of the merger, the analyst’s rating and price target are under review from a former Buy rating.

As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, John Newman is ranked #4,282 out of 4,349 analysts. Newman has a 31% success rate and faces a loss of 12.5% in his annual returns. When suggesting MSTX, Newman forfeits 50.1% in average profits on the stock.

Additionally, Yale Jen of Laidlaw rates a Hold rating on MSTX without listing a price target, Jason McCarthy of Maxim Group rates a Hold without suggesting a price target, and Michael Higgins of Roth Capital rates a Hold with a $2 price target, which implies a nearly 1,360% upside from where the shares last closed.

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