Guggenheim Views Neothetics' (NEOT) LIPO-202 as Underappreciated; Reiterates Buy

Guggenheim reiterated a Buy rating and $16.00 rice target on Neothetics Inc. (NASDAQ: NEOT) ahead of the company's 3Q15 earnings report and LIPO-202 data. Based on when the last patient was enrolled, Guggenheim expects LIPO-202 data in December. Analyst Louis Chen thinks that NEOT's LIPO-202 product is underappreciated.

Chen commented, "We remain positive on NEOT ahead of 3Q15 earnings results and what we believe will be positive data for LIPO-202 (for non-surgical abdominal fat reduction). Therefore, we think NEOT's LIPO-202 product is underappreciated for the following reasons: 1) We continue to think LIPO-202 could be the next market-leading botulinum toxin, with peak sales potential of over $1B (expected launch in '18), but NEOT's market cap suggests that the Street is underestimating this opportunity; 2) We believe investing in NEOT could provide a good entry point into the body contouring market early in its growth and development; 3) We believe there is a free call option on LIPO-102, which has orphan designation for the treatment of exophthalmos. NEOT's valuation ascribes little value for this pipeline product, in our view. Similar companies have been valued at $900MM to $2B. NEOT has a market cap of only $109MM, (EV $46MM)."

For an analyst ratings summary and ratings history on Neothetics Inc. click here. For more ratings news on Neothetics Inc. click here.

Shares of Neothetics Inc. closed at $7.89 yesterday.

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