Shares of Genocea Biosciences Inc (NASDAQ:GNCA) rose nearly 17% in after-hours trading Monday after analysts at Cantor started covering the stock, rating it a Buy and giving it a $5.00 price target, which implies a huge upside potential of 385% from today’s closing price.
While the company’s pivot to neoantigen vaccines from infectious disease has placed the valuation under pressure, lead analyst Mara Goldstein sees the current share price as an opportunity for investors to participate in a potential platform change in oncology.
Goldstein wrote, “With the previous history of technical success, Genocea has prioritized the ATLAS platform and associated development of the neoantigen therapies for the treatment of oncological malignancies, which we think holds the potential to unlock value for the shares. While we use a discounted revenue NPV model as the basis for our valuation, we note that valuations of partnerships for both public and private companies with neoantigen-based vaccine therapies have ranged from around $500 million to close to $2.0 billion for this group of companies.”
“Genocea’s first candidate will be entering the clinic this year, and that could create an opportunity to advance the company’s valuation. At a minimum, we have looked at peer valuations in the sector and deal values as a potential proxy for the upside to valuation that data could drive. For instance, Advaxis’ deal with Amgen included a $40 million upfront, $25 million equity stake and the potential for $475 million in milestones, while Eli Lilly’s deal with CureVac for a up to five cancer vaccines netted a $50 million upfront, almost equivalent stock purchase and up to $1.7 billion in potential milestones, while privately-held Moderna earned a $200 million up-front for a deal with Merck,” Goldstein continued. (To watch Goldstein’s track record, click here)
Goldstein is not the only fans of the biopharmaceutical company on Wall Street, as TipRanks analytics exhibit GNCA as a Strong Buy. Based on 6 analysts polled in the last 12 months, 5 rate Genocea stock a Buy, while only 1 issues a Hold. With a return potential of 264%, the stock’s consensus target price stands at $3.75.