vTv Therapeutics Shares Initiated With Buy Rating, $13 Target

In fact, the brokerage expects the diabetes compounds to be more likely to move the stock in the near-term despite the Street is focused on Azeliragon in mild Alzheimer's disease.

"We are more enthusiastic about the two diabetes drugs that should be ripe for partnering upon success in Phase 2. TTP399 completed a successful Phase 2b in August and TTP273 should have Phase 2b data in December, the nearest term catalyst," analyst Corey Davis wrote in a note.

Related Link: vTV Therapeutics Completes Enrollment For PHase 2 TTP273 Trial

On the other hand, although Azeliragon could be "one of the next wave of promising Alzheimer's drugs," the analyst is not expecting the stock to move near term on this drug given the history and lack of data until 2018.

The upcoming catalysts include TTP273 Phase 2 data in diabetes and publication of Phase 2 results from TTP399 in diabetes, both expected in late 2016. Also, potential partnerships on one or both of the diabetes drugs could also boost the stock.

On the partnering front, Davis said larger firms such as the following would make a good fit:

• AstraZeneca plc (ADR) AZN.
• Boehringer Ingelheim Corporation.
• Eli Lilly and Co LLY.
• GlaxoSmithKline plc (ADR) GSK.
• Johnson & Johnson JNJ.
• Merck & Co., Inc. MRK.
• Novartis AG (ADR) NVS.
• Novo Nordisk A/S (ADR) NVO.
• Sanofi SA (ADR) SNY.
• Takeda Pharmaceutical Co Ltd (ADR) TKPYY.

Meanwhile, the analyst sees a potential upside of 81 percent in vTv shares with a $13 target price.

"Our target of $13 would only be a $425 million market cap. With some of the recent deals for diabetes drugs, a standard upfront milestone payment alone could allow the stock to reach our target," Davis noted.

At the time of writing, shares of vTv Therapeutics rose 1.12 percent to $27.25.

Full ratings data available on Benzinga Pro.