UPDATE: Bank of America Upgrades Ariad Pharmaceuticals to Buy on Risk/Reward

Bank of America raised its rating on Ariad Pharmaceuticals ARIA from Neutral to Buy and increased its price objective from $20 to $26. Bank of America noted, "Despite ARIA shares +80% YTD performance, we are upgrading from Neutral to Buy based on the favorable risk/reward profile on near term data for ‘113 in lung cancer and subsequent Phase 2 expansion results, as well as our less conservative view of valuation for lead drug PON. While our new PO of $26 (up from $20) does not reflect a large premium to the current stock price, we see 15-70% upside to shares following upcoming lung cancer data (Sept 28-30). The key near term risk to ARIA is negative results for ‘113 ($6/sh of our current valuation), which seems unlikely given trial progress and management's enthusiasm." Ariad Pharmaceuticals closed at $22.01 on Friday.