Morgan Stanley, Canaccord Genuity Out Bullish On Forty Seven: 'A Significant Lead'

Forty Seven Inc. FTSV, a clinical-stage immuno-oncology companhy that went public in June, picked up two sell-side bulls Monday. 

The Analysts

Morgan Stanley analyst Matthew Harrison initiated Forty Seven with an Overweight rating and $25 price target.

Canaccord Genuity analyst Arlinda Lee initiated coverage of Forty Seven with a Buy and $22 price target. 

The Thesis

Forty Seven is developing a pipeline of drug candidates that activate the innate immune system, Cannacord's Lee said in a Monday initiation note. (See the analyst's track record here.)

The agent 5F9 is an antibody that fights against CD47 and can diminish a tumor’s ability to evade attack; CD47 is present in numerous cases of cancer, the analyst said. 

Based on the data for 5F9 in diffuse large B-cell lymphoma, Canaccord estimates the candidate is worth $10 per share. In follicular lymphoma and ovarian cancer, Canaccord estimates 5F9 is worth $3 per share.

The candidate shows both strong single-agent activity as well as activity in conjunction with other anti-cancer agents, said Morgan Stanley's Harrison. (See the analyst's track record here.)

The use of this agent could help with cancer research and development in the future, the analyst said. 

"While many other companies are trying to develop anti-CD47 antibodies, Forty Seven has a significant lead given it has addressed a key on-target tolerability issue (anemia) and has IP protecting its strategy to reduce that side effect," he said. "Further, Forty Seven has multiple mature clinical datasets potentially placing it years ahead of competitor."

Price Action

Forty Seven shares were trading up 3.48 percent at $16.35 at the time of publication Monday afternoon. 

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