Versant starts iCo at “buy”

Versant Partners has initiated coverage of iCo Therapeutics (TSX-Venture:ICO) with a “buy” rating and 12-month price target of $1.80.  The shares closed Monday at 59 cents.

iCo is an early-stage drug developer focused on in-licensing preclinical or Phase 1 drugs targeting ocular diseases.  Its lead antisense drug iCo-007 is in Phase 1/2 testing for diabetic macular edema, with final data expected by the first quarter next year.  A larger Phase 2 trial in DME is likely to start in the second half next year.

Analyst Doug Loe writes that Sanofi-Aventis’ acquisition of Fovea for $537-million (U.S.) and Alcon’s acquisition of ESBA Tech for $589-million provide a “favourable valuation comparison.”

He also points out that iCo has a deep pipeline of early-stage clinical assets and is also developing an oral formulation of the widely used antifungal agent amphotericin B, in-licensed from the University of British Columbia.