Why Recent IPO Aimmune Therapeutics Could Rise 50% to 100%

By Chris Lange Published Aug 31, 1:55PM EDT

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Aimmune Therapeutics Inc. (NASDAQ: AIMT) announced the closing of its initial public offering of nearly 11.5 million shares at the price of $16 per share. With the closing of the quiet period, analysts are now weighing in on this company. 24/7 Wall St. has chosen two key analysts to highlight that have issued calls on Aimmune.

The company develops therapies to desensitize patients suffering from food allergies. The company’s lead program is AR101, an oral immunotherapy for peanut allergy. AR101 is a standardized mixture of 13 naturally occurring peanut proteins taken orally once daily. Based on results of a Phase 2 clinical trial, the FDA has granted Breakthrough Therapy Designation to AR101. Aimmune plans to initiate a Phase 3 trial in early 2016, and results are expected in the second half of 2017 or early 2018.

Merrill Lynch initiated coverage of Aimmune with a Buy rating and price objective of $36, implying an upside of 65% from current prices. The brokerage firm estimates the prevalence of peanut allergy in the one-to-17 years age group at 1.1 million patients in the United States and 1.4 million patients in the European Union. Currently, there are no approved medical therapies on the market. Merrill Lynch forecasts peak sales of $519 million in the U.S. and $366 million ex-U.S. assuming annual cost for maintenance therapy at $6,000 in the United States and $3,500 in EU, respectively.

Credit Suisse initiated coverage with an Outperform rating and a $44 price target, implying an upside of over 100% from current prices. The firm sees Aimmune as one of the leaders in developing treatments to help manage life-threatening food allergies, with an initial focus on the large unmet need in the peanut allergies. Its lead product, AR101, has shown encouraging efficacy and safety data in Phase 2, with Phase 3 scheduled to start in early 2016 and end in the second half of 2017, setting the stage for potential commercial launch in 2018.

In its report Credit Suisse listed its investment positives as:

Aimmune is one of two companies with attractive late-stage assets in the large peanut allergy market.
AR101 has delivered compelling Phase 2 data, will be starting Phase 3 in early 2016, and has strong support from regulators, as evidenced by its Breakthrough Therapy Designation and Fast Track Status.
Potential for Aimmune’s Characterized Oral Desensitization Immunotherapy (CODIT) approach to be leveraged in other allergies, with two Phase 2 studies starting in 2016.

Separately, Piper Jaffray initiated coverage with an Overweight rating and a $35 price target.

Shares of Aimmune were up 3% at $21.75 on Monday afternoon. The stock has a post-IPO trading range of $18.47 to $28.33.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.