Cantor starts Aytu BioPharma at OW; PT $11

Cantor Fitzgerald launched coverage of Aytu BioPharma (NASDAQ:AYTU) with an “overweight” rating and $11 price target. The stock closed at $7.49 on March 29.

“Through a strategy of in-licensing and acquisition-based transactions, Aytu has built a highly diversified, growing portfolio of commercial Rx and consumer health products, with a focus on pediatrics,” writes analyst Jennifer Kim. 

“We believe Aytu’s transformation remains underappreciated and expect solid execution in 2021-plus and upwards earnings estimate revisions to drive shares higher,” she added. 

Ms. Kim said investors should watch for sales growth and G&A synergies across business segments; business development to build a novel, late-stage pipeline focused on pediatrics; and progress in non-pediatric pipeline assets.

“We think this is a good time to look at Aytu following its completed merger with Neos Therapeutics in March 2021,” Ms. Kim said. 

The Neos merger added an established ADHD franchise and grew pro forma annual revenues to more than $100-million. “Notably, this deal enhanced Aytu’s footprint in pediatrics, a market in which the company is now focused, and adjacent specialty care segments,” she added.