H.C. Wainwright launched coverage of Achaogen (NASDAQ:AKAO) with a “buy” rating and $29 price target. The stock closed at $22.11 on June 14.
Achaogen has a pipeline of novel antibiotics for serious, hard-to-treat, multi-drug resistant Gram-negative infections.
“Despite appreciating over four times since December to current levels (on impressive Phase 3 data), Achaogen shares still have substantially further to run,” writes analyst Ed Arce.
He cites upside to consensus peak sales of about $500-million for lead drug, plazomicin, and an unappreciated value for a broad set of novel pipeline assets, including C-Scape, that appears poised to enter Phase 3 next year, and perhaps reach the market in 2020.
“Achaogen expects to file the plazomicin NDA later this year, and given that the FDA has granted the drug fast track, qualified infectious disease product (QIDP) and breakthrough therapy designation, we anticipate U.S. approval by August 2018,” Mr. Arce said.
“In our view, C-Scape is an accelerated path, risk-mitigated program (with QIDP status), which may also provide important commercial synergies with plazomicin upon launch,” he added.
