Chardan: After Dicerna Pharma's 370% Run, Wait For Better Entry Point

Dicerna Pharmaceuticals Inc DRNA could become a player in the emerging field of small RNA interference, or RNAi, according to Chardan Capital Markets. 

The Analyst

Chardan analyst Keay Nakae started coverage of Dicerna with a Neutral rating and no price target. 

The Thesis

Given the 281-percent outperformance of Dicerna's stock relative to the market over the past six months and 50-percent outperformance year-to-date, new investors should wait for a more attractive entry point, Nakae said in a Friday note. (See the analyst's track record here.)

Investors are already pricing in expectations of a "benign" end to trade secret litigation with Alnylam Pharmaceuticals, Inc. ALNY is already priced into the stock at current levels, the analyst said.

The trial date is set for April 23, 2018, Nakae said. 

Notwithstanding the recent strong gains, progress updates on pipeline programs could serve as value creation events for the stock during 2018, the analyst said. Nakae named the following as potential value creation events: 

• A licensing agreement for a Phase 1-ready RNAi asset for an undisclosed rare liver disease.
• Positive proof-of-concept data for the company's lead asset DCX-PHXC in 2H18. This candidate is being currently tested in an early-stage trial to treat primary hyperoxaluria.

Dicerna announced a strategic shift 18 months ago to focus on continued development of the GaIXC platform for RNAi drug delivery to the liver through subcutaneous injection.

Chardan expects a licensing agreement with Boehringer Ingelheim to provide additional external validation of the GaIXC platform, Nakae said. 

The Price Action

Dicerna shares are up about 370 percent over the past year.

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