SVB Leerink initiated coverage of Axovant Gene Therapies (NASDAQ:AXGT) with an “outperform” rating and $18 price target. The stock closed at $5.79 on June 20.
“In our view, Axovant management has quietly executed a remarkable turnaround in under two years, remaking the company from an Alzheimer’s disease small-molecule player into a multi-asset gene therapy company, with a management team that would be considered top-tier in companies with 10 times Axovant’s current [$93-million] market cap,” writes analyst Dr. Mani Foroohar.
“In our view, Axovant is an uncommon value in biotech, with three clinical gene therapy programs, admirable financial discipline and management execution, a delivering balance sheet, improving cash flow position, and rich catalyst calendar over the next 12-to-24 months,” he added.
According to Dr. Foroohar, Axovant’s shares are undervalued in part due to market fixation on the failed Alzheimer’s program, controversy surrounding parent company, Roivant Sciences, and a perceived high cash burn.
He said the bulk of his valuation stems from the company’s Parkinson’s disease (PD) program, where there are minimal treatments for advanced-stage PD patients. “If Axovant is able to continue to demonstrate decreases in OFF-time and ON-time with troublesome dyskinesia, a path forward to approval exists,” he added.
