Acacia Research (ACTG) PT Raised to $7 at Craig-Hallum on Growing Value of Pre-IPO Holdings

Craig-Hallum analyst Anthony Stoss raised the price target on Acacia Research (NASDAQ: ACTG) to $7.00 (from $6.00) on the belief that private biotech positions are likely to lead to a significant increase in book value in 2021. On Friday afternoon, Immunocore filed for a $100M IPO on the back of positive phase 3 clinical trial (announced in late November) where tebentafusp demonstrated superior overall survival in a randomized trial. This is the first positive phase 3 clinical trial for any T cell receptor therapeutic and first for any bispecific in a solid tumor.

The analyst reiterated a Buy rating, stating "the company raised money at a $2B valuation in 2015, $650M valuation in 2018, but now with the positive trial, could potentially fetch a high valuation. While the pricing and valuation of Immuncore remain unknown, we think it will be one of the hot IPOs of 2021 and given ACTG’s 5% ownership they stand to benefit significantly. Additionally, we highlight ACTG owns a 6% stake in Oxford Nanopore that is currently on their books at a value of $108M as of last quarter. Oxford Nanopore is rumored to be one of the most sought-after IPOs this year and is compared to Pacific Biosciences of California (PACB) with a market cap of $7B currently. Running the math on this valuation ACTG’s Oxford position would be worth $420M. With just ACTG’s ownership in these two possible biotech unicorns that could IPO at sky-high valuations, we think their book value is about to increase substantially in 2021."

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