Tuesday, Truist Securities initiated coverage on shares of Longboard Pharmaceuticals Inc (NASDAQ: LBPH) with a Buy rating and set a price target of $60. The firm's analysis suggests that Longboard's lead drug, bexicaserin, could outperform the current market leader in epilepsy treatment, Fintepla, which is projected to reach approximately $1 billion in sales by 2027 according to UCB Pharma.
The coverage notes that bexicaserin, which is expected to enter Phase 3 clinical trials by the end of 2024, has shown superior safety and comparable efficacy to Fintepla. This could enable bexicaserin not only to replace Fintepla but also to expand the current market, which is currently only about 5% penetrated.
In addition to bexicaserin, Longboard Pharmaceuticals is developing a second asset, LP659, which is an S1P modulator targeting CNS and inflammation and immunity (I&I) indications. The Phase 1 data for LP659 indicates a promising therapeutic window that could surpass the specificity of currently available S1P modulators.
Truist Securities' positive outlook for Longboard Pharmaceuticals is based on the potential market growth and the promising data surrounding the company's drug candidates. The firm's Buy rating and price target reflect confidence in Longboard's pipeline and its ability to capture a significant share of the epilepsy treatment market.
In other recent news, Longboard Pharmaceuticals has been making significant strides in the biopharmaceutical field. Baird has reaffirmed its Outperform rating on Longboard stock following positive nine-month open-label extension (OLE) data on bexicaserin. The firm's confidence in Longboard's potential remains steady, with a price target of $60.00.
The company's drug, bexicaserin, received Breakthrough Therapy designation from the FDA, which led Baird to raise its price target for Longboard from $36 to $60. Citi also increased its price target from $40 to $45, following the FDA's approval of a Phase 3 study for bexicaserin.
Analysts, including those from H.C. Wainwright & Co and Cantor Fitzgerald, also hold a bullish stance, setting a price target of $60. This shows the confidence in Longboard's growth prospects following the FDA's recognition of bexicaserin's potential in treating Developmental and Epileptic Encephalopathies (DEEs).
Furthermore, Longboard plans to initiate a Phase 3 program by the end of 2024 and expects Phase 1 data for another therapeutic candidate, LP659, in the second quarter of 2024. These are among the recent developments that highlight Longboard's potential to address significant unmet needs in epilepsy treatment.
InvestingPro Insights
Truist Securities' bullish stance on Longboard Pharmaceuticals (NASDAQ: LBPH) is complemented by certain financial metrics that could be of interest to investors. With a market capitalization of $1.34 billion, Longboard's financial health is underscored by the fact that it holds more cash than debt, a reassuring sign for investors looking at the company's balance sheet resilience.
Despite not being profitable over the last twelve months and analysts' expectations of net income decline this year, Longboard has demonstrated significant market performance with an impressive year-to-date price total return of 472.31%.
InvestingPro Tips reveal that while Longboard has had a high return over the last year and liquid assets that exceed short-term obligations, it suffers from weak gross profit margins and analysts have revised their earnings downwards for the upcoming period.
Moreover, the company does not pay a dividend, which may be a consideration for income-focused investors. For those interested in a deeper dive into Longboard Pharmaceuticals' financials, there are over ten additional InvestingPro Tips available, providing a comprehensive analysis of the company's prospects.
As of the last twelve months ending in Q2 2024, Longboard's P/E ratio stands at -20.74, reflecting market expectations of future earnings growth. The company's significant price uptick over the last six months, with a 75.53% return, aligns with the positive sentiment expressed by Truist Securities. These insights, including the InvestingPro Fair Value estimate of $28.47, can help investors weigh the potential risks and rewards associated with Longboard's stock.
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