Barclays: Pfenex Is Worth $28/Share

In a report published Monday, Barclays analysts initiated coverage of Pfenex, Inc. PFNX with an Overweight rating and price target of $28. The analysts believe the stock offers an attractive investment option, given the company's "differentiated platform for the development of biosimilars and complex generics." Investor focus is currently on biosimilars, following the U.S. approval for the first biosimilar. The reason Pfenex stands out from its peers is its differentiated pipeline, which includes its proprietary technology platform that gives it a key edge over the competition. "PFNX's platform for non-glycosylated proteins speeds development and provides cost advantages based on its ability to produce complex biologics at high yields," the analysts said. The company signed a partnership in February with Hospira, Inc. HSP to co-develop and commercialize its biosimilar product to Lucentis. This helps de-risk the development expenses for Pfenex, reducing development exposure to $20 million. In addition, Hospira will bear all the litigation costs involved. "We believe the HSP partnership validates PFNX's platform to produce high fidelity biosimilars, a point reinforced by our conversations with other strategic players," the analysts added. The analysts also believe that the company has near-term opportunities via its pipeline. Pfenex's Betaseron is in Phase 1 and is expected to begin comparative clinical trial in 2016. Neulasta might get a shortcut to approval, based on recent reports of the FDA seeking PK/PD data for health volunteers. The generic drug, Forteo, also has significant value, according to the analysts.