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Monday’s Market Insights: HTG Molecular Diagnostics Inc (HTGM), La Jolla Pharmaceutical Company (LJPC), Shutterstock Inc (SSTK)

HTG Molecular Diagnostics Inc (NASDAQ:HTGM) shares skyrocketed today, up by 135% as of 02:35 p.m. EST, after the company announced that its new direct-target sequencing chemistry will be available in the company’s VERI/O laboratory as a service offering beginning in the first quarter of 2017.  The new chemistry is designed for direct sequencing of specified DNA and, in the future, RNA targets with the same high sensitivity and specificity as the company’s current HTG EdgeSeq chemistry applications. The initial panel planned for the VERI/O laboratory will detect common mutations in the EGFR, KRAS and BRAF genes for retrospective research studies especially from small and difficult samples, such as formalin-fixed, paraffin-embedded (FFPE) tissue.

Rodman analyst Raghuram Selvaraju recently noted, “The company is focused on advancing its clinical tests for potential launch in 2017 and establishing more collaborations with pharmaceutical companies, which should boost sales of consumables per instrument as well as the install base. Anticipating the launch of a clinical test menu and potential milestone payments from the partnership with Merck KGaA in 2017, we remain optimistic about the company’s revenue growth potential and maintain our valuation of HTG’s platforms at $70M. However, our projected shares outstanding in 12 months have increased to 14.7M shares by end-2017 from 12.7M shares. Excluding the projected debt position, the estimated market value of the firm at $65M leads to a price target of approximately $4.50.”

As of this writing, the 3 analysts polled by TipRanks (in the past 12 months) rate HTGM stock a Buy. With a return potential of 70%, the stock’s consensus target price stands at $4.83.

La Jolla Pharmaceutical Company (NASDAQ:LJPC) shares jumped over 85% in Monday’s trading session, after the company announced positive top-line results from the ATHOS-3 (Angiotensin II for the Treatment of High-Output Shock) Phase 3 study of LJPC-501 (angiotensin II) in patients with catecholamine resistant hypotension (CRH).

The analysis of the primary efficacy endpoint, defined as the percentage of patients achieving a pre-specified target blood pressure response, was highly statistically significant: 23% of the 158 placebo-treated patients had a blood pressure response compared to 70% of the 163 LJPC-501-treated patients (p<0.00001). In addition, a trend toward longer survival was observed: 22% reduction in mortality risk through day 28 [hazard ratio=0.78 (0.57-1.07), p=0.12] for LJPC-501-treated patients.

In light of the clinical success, SunTrust analyst Yatin Suneja raised the price target on LJPC from $38.00 to $57.00, while reiterating a Buy rating on the stock. Suneja stated, “We believe today’s highly favorable ATHOS-3 data (primary endpoint met; positive trend in mortality) are supportive of approval in CRH, which could be at least $500MM opportunity; an NDA filing is expected in 2H17 and full data are expected in 2017 at a major medical conference and publication in a “top-tier” journal. In our view, these results provide validation for LJPC’s capital-efficient strategy of developing naturally occurring peptides with well-understood biological functions for life-threatening diseases.”

Shutterstock Inc (NYSE:SSTK) shares are falling nearly 19%, after the stock photo and video firm reported fourth-quarter results below Street estimates, as was the company’s 2017 outlook. Q4 Revenue of $130 million was below Street’s $135 million estimate, as was Adj. EBITDA of $25.9 miilion, compared to Street estimate at $29 million. The company issued FY17 Revenue guidance of $545-560 million, 5% below Street at the mid-pt. EBITDA guide of $105-110 million was also below Street’s prior $119 million.

In reaction, RBC analyst Andrew Bruckner lowered his price target on SSTK to $50 (from $60), while reiterating a Sectir Perform rating on the stock. Bruckner commented, “SSTK is beginning a “transformation” (a term that causes anxiety) to a platform vs. a simple marketplace. This anxiety is especially present as one of SSTK’s largest competitors (Adobe) is already well versed in Enterprise software (and sales). However, L-T moving to a more customer useful platform is probably the right move. Positively, our fear of a significant increase in competition from the Fotolia acquisition has been meaningfully diminishing over time […] For now, we remain on the sidelines until we see positive traction from the transformation and/or a meaningful acceleration to top-line growth.”


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