Why One Analyst Is Doubling Its Target After Hepatitis B Study

By Chris Lange Published May 19, 10:51AM EDT

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Why One Analyst Is Doubling Its Target After Hepatitis B Study — © SeventyFour / Getty Images

Arbutus Biopharma Corp. (NASDAQ: ABUS) shares jumped on Tuesday after the company reported positive data from its early stage clinical trial in patients with chronic hepatitis B virus (HBV) infection. As a result, one analyst took a liking to Arbutus and doubled its price target.

Specifically, the company reported positive follow-up data from Phase 1a/1b clinical trial in chronic HBV subjects on nucleos(t)ide therapy who received a single subcutaneous injection of 60 mg of AB-729, a proprietary GalNAc delivered RNAi compound.

William Collier, president and CEO of Arbutus, noted that the new data from the study further demonstrated the robust activity of AB-729. He added that “these data keep us on track for achieving our goal of delivering a combination therapy that includes HBsAg reduction in chronic hepatitis B subjects.”

Wedbush weighed in on Arbutus, upgrading to an Outperform rating from Neutral and raising its price target to $4 from $2, implying an upside of 114% from the most recent closing price of $1.87.

[nativounit]

The boutique brokerage firm detailed in its report:

We see the favorable safety profile, and overall magnitude and continued reduction of HBsAg levels through Week 12 at this dose as an indication that AB-729 is potentially competitive to other HBV RNAi agents in development. Furthermore, ABUS’ ultimate strategy may be differentiated by the company’s greater insight into durability of HBsAg knockdown from a single dose vs. competitors, which ultimately may allow for less frequent dosing within a defined combination treatment regimen. While we await progression of ABUS’s HBV preclinical pipeline into the clinic to gain further insight into a potential combination path, we believe ABUS shares are currently undervalued given the value attributed to similar competitor assets.

Arbutus Biopharma stock traded up about 30% to $2.45 on Tuesday, in a 52-week range of $0.82 to $3.66. The consensus price target is $9.32.

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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.