Guggenheim Starts Xenon Pharmaceuticals (XENE) at Buy; Positive on Pipeline
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Guggenheim initiates coverage on Xenon Pharmaceuticals (NASDAQ: XENE) with a Buy rating and a price target of $20.00, saying the sales potential of XENE's pipeline in 2021+ is likely to exceed consensus expectations.
"Earnings upside could be driven by XENE’s pipeline, and XENE is an interesting asset in a consolidating industry," analyst Louise Chen commented. The following three points support the firm's positive investment thesis on the stock:
1. XEN801 addresses an unmet need within the, large, ~$3.7B acne market and could present a novel mechanism of action to treat acne. The three mechanisms of action most commonly used to treat acne have been available for over 30 years. That said, innovative therapies launched over the past few decades have resulted in significant sales. This gives us confidence that XEN801 sales could exceed consensus expectations if it is approved.
2. The pain market needs safer drugs, outside of opioids, which XENE’s Nav1.7 blockers could address. The government and the FDA’s desire to reduce the abuse of opioids supports the development of novel pain drugs such as XENE’s Nav1.7 blockers. We believe XENE and its partners for these drugs are well positioned to benefit from initiatives to move the market away from opioids.
3. There is a free call option on XENE’s approved drug, Glybera, and other pipeline assets such as TV-45070 and Nav1.6, among others. Some of these assets could be monetized through partnerships.
Shares of Xenon Pharmaceuticals closed at $7.83 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, FDA, Hot New Coverage, New Coverage
Related EntitiesEarnings, Louise Chen, Guggenheim
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