Oppenheimer Bullish On Eiger Biopharmaceuticals Shares, Sees 71% Upside

Drug Pipeline

Eiger's lead asset, Sarasar, is a farnesyltransferase inhibitor in development to treat hepatitis D. Eiger is also developing Exendin (9-39) as a treatment for hypoglycemia occurring after bariatric surgery, and Bestatin for pulmonary arterial hypertension and lymphedema.

Oppenheimer noted that HDV infection leads to hepatitis D, which is the most aggressive form of hepatitis and has no FDA-approved treatments. Sarasar and IFN treatment decrease HDV RNA levels, and Eiger is investigating the optimum dose and combination regimen in various Phase 2 trials, expected to read out in 2016/2017.

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"We recommend owning Eiger ahead of these upcoming data readouts as we expect the shares will positively reflect the clinical development progress," analyst Carlos Solorzano wrote in a note.

Solorzano, who has started the coverage of the stock with an Outperform rating and $34 price target, noted that Stanford-run studies showed Exendin (9-39) can normalize the hypoglycemic response in Roux-en-Y patients.

Eiger is currently testing a proprietary subcutaneous formulation of Exendin in hypoglycemic patients, with data expected by the end of 2016.<?p>

In addition, Eiger is conducting a Ph2 trial in PAH patients investigating the efficacy of Bestatin over SOC on pulmonary vascular resistance. Data from this trial is expected in 2017.

Further, the analyst noted there is patent-pending pre-clinical evidence of efficacy for Bestatin in lymphedema, and Eiger expects to report data from its Phase 2 ULTRA trial in 2017.

Future Tailwinds

Following are the upcoming catalysts for the stock:

• 2Q16: Begin Phase 2 LIBERTY trial of Bestatin in PAH
• 2Q16: Begin Phase 2 ULTRA trial of Bestatin in lymphedema
• 4Q16: Report data from Phase 2 MAD study of subcutaneous Exendin (9-39) in RYGB patients
• 2H16: Begin monotherapy Phase 2 trial of pegylated interferon lambda in hepatitis D
• 2017: Report top-line data from LIBERTY and ULTRA trials

Meanwhile, the analyst expects Eiger to report a loss of $6.81 a share for 2016 and $5.13 a share for 2017.

At the time of writing, shares of Eiger were down 0.35 percent at $19.84.