UPDATE: Aegis Capital Initiates Coverage on Evoke Pharma on Attractive Valuation

In a report published Tuesday, Aegis Capital analyst Raghuram Selvaraju initiated coverage on

with a Buy rating and $60.00 price target. In the report, Aegis Capital Corp. noted, “We are initiating coverage on Evoke Pharma, Inc. with a Buy rating and an 18-month price target of $60.00 per share. In our view, this firm represents one of the most risk-mitigated development-stage investment opportunities available in the healthcare sector. Evoke is preparing to start a pivotal Phase 3 trial with its sole product candidate, EVK-001. This agent is an intranasal formulation of metoclopramide, a drug that was originally approved in 1979 for diabetic gastroparesis, a disorder that involves disruption of the motility of the upper gastrointestinal (GI) tract. Evoke has obtained sanction from the FDA indicating that positive data from a single pivotal trial would be sufficient to support a regulatory filing and potentially obtain approval for the drug. Since the compound in question is already approved for the same indication in which Evoke is aiming to test it, this program seems a low-risk proposition. We expect the ~200-patient, randomized, placebo-controlled trial to begin enrollment early in 2014.” Evoke Pharma closed on Monday at $8.15.