The Street May Be Underappreciating Alder Biopharma's Phase 3 Data

Shares of Alder Biopharmaceuticals Inc ALDR hit a new 52-week low Wednesday for the second consecutive day as many investors found fault with the company's results from a phase 3 trial of its Eptinezumab therapy for the treatment of migraines.

Piper Jaffray's Charles Duncan, Ph.D. defended the company's results in a research report Tuesday. On Wednesday, analysts at Credit Suisse turned incrementally bearish on the stock but still see further upside ahead.

Credit Suisse's Vamil Divan, MD downgrades Alder's stock rating from Outperform to Neutral with a price target lowered from $30 to $17 as the company's data release was in fact "better than appreciated." In fact, the data release contained "some areas of optimism," such as the speed of onset and depth of response in a subset of patients.

However, the company is likely to have trouble in getting its "more nuanced message through" in a market where there are already multiple established competitors, Divan stated. In addition, Alder's stock carries the overhang of uncertainties around intellectual property and additional financing needs in the near term. All combined, it is difficult to recommend buying shares moving forward.

Nevertheless, Alder's current market cap stands at under $700 million, which indicates there is room for upside, assuming its drug makes to the market and generate peak sales of just $250 to $300 million.

At time of publication, Alder had slipped 8.35 percent on the day to $12.35.

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