Histogenics Corp (HSGX) Strong Partnership Could Open Door to Significant Market for Long-Term Boon

Canaccord's Kyle Rose is impressed that not only did HSGX achieve its goal to nab a partnership by the year's end, but the partner in Japan is a stellar choice with experience in regenerative medicine.


Histogenics Corp (NASDAQ:HSGX) shares are on a 17% jump today once the Street caught word of this morning’s good news: the regenerative medicine healthcare firm is collaborating with MEDINET for development and commercialization of NeoCart.

As the HSGX team had hoped to establish a partnership by the end of this year for its investigational cartilage tissue implant designed to treat various knee cartilage injuries, it looks like Histogenics is right on schedule. This step forward offers Histogenics a solid foothold in the Japan market, which one bull commends as equal parts “expanded market opportunity and near-term financing.”

Canaccord analyst Kyle Rose is “incrementally positive,” enthusiastic that not only did the healthcare player secure just any partnership, but the alliance points to “a strong partner in Japan with extensive regenerative medicine experience, as well an agreement with multiple near- and long-term milestone payments, thus strengthening the company’s balance sheet through a non-dilutive financing opportunity.”

As far as Rose sees the agreement, this “represents another successful milestone toward expanding NeoCart’s addressable market to include Japan, which management estimates is worth over $200M annually,” as the analyst concludes: “In sum, while commercialization in Japan is not expected until 2021, we are encouraged by the progress and anticipate the geography could be a meaningful market for Histogenics’ long-term success.”

In reaction, the analyst is celebrating along with the rest of upbeat investors today, reiterating a Buy rating on HSGX stock with a price target of $4, which implies a 96% upside from current levels.  (To watch Rose’s track record, click here)

TipRanks underscores strong bullish initial word on this regenerative medicine healthcare company, with all 3 analysts polled in the last 3 months rating a Buy on HSGX stock. With a meaningful return potential of 79%, the stock’s consensus target price stands at $3.67.  

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