89bio initiated with an Outperform at Evercore ISI

Evercore ISI analyst Liisa Bayko initiated coverage of 89bio (ETNB) with an Outperform rating and $49 price target. 89bio trades at a 60% discount to peer Akero Therapeutics (AKRO), which has a similar drug candidate in a similar stage of development, which presents “a compelling arbitrage opportunity for investors with a long-term view,” the analyst tells investors. Phase 3 programs are “just getting off the ground” and Evercore expects a relatively long execution period during which all eyes will be on the evolution of the NASH market, says the analyst, who notes that SHTG is a second indication for pegozafermin that is already in Phase 3 testing. However, the firm thinks additional funds will be needed to complete both Phase 3 programs in NASH and SHTG, the analyst added.