It has been an eventful week for Axovant Gene Therapies (AXGT). Shares took off on Monday, after the drug maker released positive six-month follow-up data from the second cohort of the SUNRISE-PD Phase 2 trial evaluating gene therapy AXO-Lenti-PD in Parkinson’s disease (PD) patients.
The therapy was generally well-tolerated by all 4 patients, and no serious adverse events were reported after 6 months.
But as investors digested the news, on closer inspection it appeared that only two evaluable participants displayed a 40% improvement in the UPDRS Part III “OFF” score, the metric which evaluates a patient’s motor function. Axovant said that due to COVID-19 and one patient’s refusal, 2 out of the 4 patients were unable to participate in UPDRS assessments.
So, investors felt aggrieved, and on Tuesday began a two-day selling spree which gave Monday’s gains back to market with interest.
For SBV Leerink analyst Mani Foroohar, however, the selloff is unwarranted. Foroohar notes the fact “COVID concerns in the elderly would impact some patient participation in UPDRS assessments as understandable.” The analyst points to several catalysts on the horizon and recommends investors take notice of an underappreciated opportunity.
“We view this data as positive for AXO-Lenti-PD, and at least in line with data from competitor VYGR/NBIX (albeit at a 6-month time point vs 2+ years),” Foroohar said. “We continue to believe AXGT shares are undervalued, with a risk/reward skewed to the upside, and look to virtual R&D day on October 30th, 2020 for more detail along with KOL commentary and clarity on the path forward for the program… We see these data as supportive for AXGT moving forward to a randomized, sham-controlled study as they expect to dose their first patient in the EXPLOREPD study in 2021.”
Foroohar has an Outperform (i.e. Buy) rating on the shares alongside a $12 price target. Non-disgruntled investors are looking at upside of a whopping 225% from current levels. (To watch Foroohar’s track record, click here)
Among Foroohar’s colleagues, AXGT qualifies as a Moderate Buy based on 1 Buy and 1 Hold, each. The average price target is almost identical to Foroohar’s, and at $12.5, is set to reward investors with returns of 239% in the year ahead. (See Axovant price targets and analyst ratings on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.