Roth Capital Remains Bullish on Mast Therapeutics Inc (MSTX); Says Market Overreacting to Brief Delay in EPIC Top-Line Data
Mast Therapeutics Inc (NYSEMKT:MSTX) just announced to frustrated investors that EPIC results for its Sickle Cell pipeline drug vepoloxamer are pushed back now for at least the next month. Meanwhile, Mast Therapeutics has raised $6.7 million through an at-the-market offering in its second quarter, issuing 17 million shares averaging presently around $0.39 per share.
Roth Capital analyst Michael Higgins still reiterates a Buy on MSTX with a $2.00 price target, marking a significant hike in upside of almost 451% from where MSTX shares last closed. Higgins finds the market to be “overreacting” to a delay that right now looks to last in the range of two to six weeks. The analyst explains his perspective, elaborating, “While EPIC results are being delayed roughly one month, the news follows a prior delay as investors’ patience is being tested. While there’s no signal of fundamental problems, the use of the ATM may also have pushed shares lower.”
Though Higgins acknowledges this delay will prove to ultimately be a test of patience for MSTX investors, it appears the delay is less to do with problems with efficacy and more to do with holiday breaks (both summer as well as religious), issues with medical personnel turnover, and setbacks related to general political unrest. For the present, Higgins remains positive, as he believes, “We continue to look for vepoloxamer’s 2H’17 launch. While this news is frustrating, we don’t believe this has/will reduce the fundamental value of EPIC’s results.”
As usual, we recommend taking analyst notes with a grain of salt. They are often successful in moving the stock price, but you always need to take things into perspective. According to Tipranks, out of 4,087 analysts, Michael Higgins is ranked #3,914, with a success rate of 24% and an average loss of 15.3% in his annual returns.
TipRanks analytics indicates MSTX stock is a Strong Buy. Of 3 analysts who have offered recommendations in the past 3 months for Mast Therapeutics, 100% rate a Buy. The average price target is $3.33, marking an 825% upside from where the stock is currently trading.