Jefferies has initiated a ‘buy’ rating on Rocket Pharmaceuticals. The biotech firm’s experimental gene therapies are the basis for this rating. Jefferies also set a price target of $29.
The analysts are optimistic about Rocket’s treatment for a rare genetic heart condition, which they believe could be a $1 billion opportunity for the company.
Shares of Rocket Pharmaceuticals (RCKT) jumped 5.5% intraday Wednesday when Jefferies initiated coverage with a ‘buy’ rating due to optimism about the experimental drugs in its pipeline. The price target of $29 is more than double its current value.
The analysts note that Rocket Pharma is testing five or more gene therapy treatments for rare diseases. They are especially focused on RP-A501 (AAV9) for Danon heart disease, a genetic disorder with no current treatment options.
The analysts explain that the medicine has a high 65-75% chance to succeed in a pivotal Phase II study next year and might be a $1 billion opportunity for the firm. A positive result could boost the stock price 100%, implying a favorable risk/reward at $1.3B cap.
The analysts argue that a discounted cash flow (DCF)-based sum-of-the-parts (SOTP) valuation justifies the $29 price target.
This report is good news for Rocket Pharmaceuticals investors who haven’t had much lately. The shares have steadily declined this year, hitting a more than two-year low last week. Even with today’s advance, the stock has lost nearly 60% of its value in 2024.