Ladenburg Thalmann initiated coverage of Neon Therapeutics (NASDAQ: NTGN) with a “buy” rating and $20 price target. The stock closed at $8.54 on Sept. 28.
“We believe NEO-PV-01 enjoys a powerful first mover advantage in neoantigen therapies for improving both the depth and breadth of response of checkpoint inhibitors,” writes analyst Kevin DeGeeter.
Mr. DeGeeter’s investment thesis is based on, among other things, autologous neoantigens, such as NEO-PV-01, boosting progression free survival and survival of checkpoint inhibitor therapy by eliciting a deeper immune response. In addition, he said first movers enjoy both more rapid selection optimization and commercial barriers to switching as oncologists gain familiarity with administration of the autologous product.
“If the addition of NEO-PV-01 to checkpoint therapy can improve durability of response, in our view, the drug will be an important option in first line treatment of solid tumors with peak sales potential of $1-billion-plus,” he added.
Mr. DeGeeter said the presentation in the first half of 2019 of top-line Phase 1b data for NEO-PV-01 in combination with nivolumab for melanoma, non-small cell lung cancer or bladder cancer patients would be an “important validation of Neon’s personalized neoantigen platform and as a material catalyst for Neon shares.”
