Roth Capital Partners raised its price target for Arch Therapeutics (OTCQB:ARTH) to $3 from $2.10 after the FDA cleared the company’s AC5 Topical Gel for use in partial and full-thickness skin wounds, such as pressure sores, leg ulcers, diabetic ulcers and surgical wounds. The stock closed at 59 cents on Dec. 17.
“We believe that [FDA approval] represents the first of several future approvals for Arch’s self-assembling peptide platform technology for use as a medical/surgical barrier,” writes analyst Dr. David Solomon.
Specifically, he said approval of AC5 Topical increases the assumed approval probability of AC5 Surgical, targeting vascular and nonvascular surgical indications, to 70% from 50%.
In addition, Dr. Solomon expects CE Mark for AC5 Topical and a commercial partnership agreement in the first half of 2019. “While both of these potential milestones could represent catalysts for the shares, we believe that the latter could be more meaningful, especially if it includes any non-dilutive funding, which could extend Arch’s runway beyond 2019,” he added.
