UPDATE: Oppenheimer Starts Bio Blast Pharma (ORPN) at Outperform, Price Target $32

Oppenheimer initiated coverage on Bio Blast Pharma (NASDAQ: ORPN) with an Outperform rating and a price target of $32.00. Analyst Yigal Nochomovitz views the stock as deeply undervalued.

"Bio Blast is an Israeli orphan disease company with a compelling and diverse pipeline targeting rare genetic disorders with high unmet need. We see Cabaletta (stabilizing drug for protein aggregation disorders) and BBrm (readthrough drug for SMA) as the key near-term value drivers. Both drugs benefit substantially from: 1) established safety profiles (Cabaletta is a GRAS substance, BBrm is an approved antibiotic) and 2) development in diseases with no approved therapies where the bar for efficacy looks lower than average. The company's mitochondrial protein replacement technology (mPRT) is earlier-stage (we do not model), but has significant long-term potential for diseases such as Friedreich's Ataxia," said Nochomovitz.

"Catalysts. 1) Initial Cabaletta safety/efficacy YE14/YE15; 2) initial SMA safety/ efficacy mid-2015; and 3) multiple publications expected on preclinical data for OPMD/SMA/Friedreich's Ataxia in 2015, which over time should drive increasing appreciation for the potential of Bio Blast's 3 platform technologies. Model. We assume ~25%/~7.5% peak WW share in OPMD/SMA (~$280/~$300M peak)," he added.

For an analyst ratings summary and ratings history on Bio Blast Pharma click here. For more ratings news on Bio Blast Pharma click here.

Shares of Bio Blast Pharma closed at $7.68 yesterday.

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