Analyst Projects Over 130% Upside In This Biopharma

Shanthi Rexaline

NGM Biopharmaceuticals Inc (NASDAQ: NGM), which went public about a year back, has seen its shares trade mostly below the IPO price of $16. An analyst at Raymond James said the stock deserves to trade at a much higher valuation.

The NGM Analyst

Steven Seedhouse initiated coverage of NGM shares with a Strong Buy and $31 price target. 

The NGM Thesis

NGM has created a "sizable novel biologic pipeline," and among its pipeline candidates, aldafermin, MK-3655 and NGM621 drive Raymond James' thesis and model, Seedhouse said in a Monday initiation note. (See his track record here.)

Aldafermin, which is being evaluated in non-alcoholic steatohepatitis, or NASH, with fibrosis, seems comparable to Intercept Pharmaceuticals Inc's (NASDAQ: ICPT) Ocaliva — the frontrunner in the NASH race — on fibrosis, but with better NASH resolution and no pruritus in a Phase 2b study, the analyst said.

See Also: Teva Analyst Says Shares Are Pricing In Too Much Risk

"Aldafermin may ultimately become the first therapy to achieve both FDA-recommended co-primary endpoints in NASH," he said. 

Seedhouse said he expects the outcome of Ocaliva's June 9 AdCom to provide key insight into the potential downstream approvability/label for aldafermin in NASH.

The analyst is also bullish about MK-3655, which is a potent insulin sensitizer targeting Type 2 diabetes patients with NASH.

"Given positive results on T2DM biomarkers and liver fat reduction in Phase 1b, MK-2655 looks like a promising candidate for F0/F1 NASH with diabetes," he said. 

NGM Price Action

NGM shares were trading 4.63% higher at $14.02 at the time of publication Tuesday.

Latest Ratings for NGM

Date Firm Action From To
Apr 2020 Raymond James Initiates Coverage On Strong Buy
Mar 2020 Citigroup Maintains Buy
Mar 2020 Stifel Maintains Buy

View More Analyst Ratings for NGM
View the Latest Analyst Ratings

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