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Concert Pharma called buy, target $20, by Wainwright

July 25, 2017

Shares of Concert Pharmaceuticals Inc CNCE gained more than 13 percent Monday morning and traded above the $15 per share for the first time since early May after analysts at H.C. Wainwright & Co. initiated coverage of the stock with a bullish rating.

Wainwright’s Andrew Fein initiated coverage of Concert’s stock with a Buy rating and $20 price target as the company’s deuteration technology represents a “de-risked platform for drug discovery” along with a lead clinical asset for alopecia areata.

 

Over the past five years, the company has leveraged its proprietary platform as a source for external partnerships and has had four validating partnership deals, the analyst continued. The most recent partnership related to the acquisition of CTP-656 which is under FTC review before the final close date in October.

While there is “little clarity” into the review process of CTP-656, investors should believe in the “fundamental value of a deuterated potentiator to the many players still eager to assemble the best-in-class triple combo for cystic fibrosis,” Fein stated.

CTP-543

The recent clinical hold lift of Concert’s CTP-543, a deuterated ruxolitinib (a JAK
1/2 inhibitor), for the treatment of adults with moderate-to-severe AA, should be viewed as the removal of an overhang and clears a path for a phase 2a readout in the bottom half of 2018, Fein also noted.

“We suspect that this clinical hold may [have] less to do with endogenous factors (e.g., the compound or trial itself), and more to do with exogenous factors (e.g., the evolving sphere of research around AA field and JAK inhibitor research broadly),” he wrote. “As such, we applaud management’s attitude in starting an open and conciliatory dialogue with the agency early on to prevent any possible negative downstream scenarios and allow the data to speak for itself.”

Bottom line, the analyst’s bullish stance is due to the long-term potential of CTP-543, the potential of the partnered AVP-786 and continued M&A efforts to partner CTP-656.

 

Latest Ratings for CNCE

Date Firm Action From To
Jul 2017 H.C. Wainwright Initiates Coverage On Buy
Jul 2016 Stifel Nicolaus Initiates Coverage on Buy
Mar 2016 JMP Securities Maintains Market Outperform

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