H.C. Wainwright Starts Transition Therapeutics (TTHI) at Buy

H.C. Wainwright initiated coverage on Transition Therapeutics (NASDAQ: TTHI) with a Buy rating and a price target of $10.00.

Analyst Andrew S. Fein said, "TTHI has 2 molecules in clinical evaluation in 3 indications. ELND005 is a small molecule in Phase 2 for Alzheimer’s disease associated agitation, and Down syndrome associated cognitive disability. TT401 is a GLP1 agonist in Phase 2 for Type 2 diabetes. Beyond these, the company is focused on in-licensing additional molecules to expand its pipeline and create future value."

"We are initiating coverage on Transition Therapeutics (TTHI) with a BUY rating and 12-month price target of $10 per share. We arrive at our target by a sum-of-the-parts analysis for ELND005 and TT401. We value ELND005 in Alzheimer’s disease agitation at $258M by applying a 6x multiple on TTHI’s 2022 sales of $813M (after subtracting Perrigo’s 6.5% royalty of $56M from total sales of $869M) discounted back 48% (our discount rate reflects the current stage of development as well as the historical challenges of developing therapeutics for the indication). We value TT401 at $72M by applying a 6x multiple to TTHI’s estimated 14% royalty (from 2023 total sales of $1.5BN) of $209M, discounted back 40% (our discount rate reflects the drug’s current stage of development but also takes into account the established mechanism-of-action). To this we add mid-2015 cash of $40M. We do not currently assign any value to ELND005 in Down syndrome cognitive disability due to the early nature of the program which can provide future upside for investors as the pipeline matures," he added.

For an analyst ratings summary and ratings history on Transition Therapeutics click here. For more ratings news on Transition Therapeutics click here.

Shares of Transition Therapeutics closed at $6.58 yesterday.

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