Market Overview

Chardan Reiterates Sell On Axovant

Share:

In a report published Thursday, Chardan Capital Markets analyst Gbola Amusa commented on Axovant Sciences Ltd (NYSE: AXON) following the company's completer analysis from a previously-published phase IIb which were "less robust scientifically" and "less relevant to the regulator."

Amusa said that a valuation above the $20 level assumes two "unlikely" characteristics that need to be true. First, RVT-101 is approved by the FDA, even though no NME (new molecular entities) has been approved in Alzheimer's since 2003. Second, RVT-101 is the only Alzheimer's drug approved, or sees very limited competition even if others are approved.

The analyst further argued that Axon's current valuation ignores 101 "failures" or "unsuccessful attempts" to develop drugs to treat Alzheimer's since 2003. This implies that for each one success, there were 34 failures.

"We understand that a probability of success of over 60% for RVT-101 is needed to justify valuation over $20," Amusa wrote. "If so, we believe such probabilities are too optimistic given the history of Alzheimer's disease failures and the history of RVT-101 specifically; and, we question whether our assumed 55% probability of success (with lower non-risk-adjusted estimates) is too high as we continue our diligence in the space."

Finally, Amusa argued that Axon's current valuation also ignores the fact that there are 24 other drugs (if not more) in late-stage clinical development in Alzheimer's disease.

Bottom line, Axovant's IPO "overpriced" RVT-101 given "mixed" phase II data in dementia. As such, shares are expected to underperform and are Sell rated with a price target lowered to $9.50 from a previous $10.

Latest Ratings for AXON

DateFirmActionFromTo
Dec 2018JefferiesUpgradesHoldBuy
Jan 2018Cowen & Co.DowngradesOutperformMarket Perform
Jan 2018Chardan CapitalUpgradesSellNeutral

View More Analyst Ratings for AXON
View the Latest Analyst Ratings

 

Related Articles (AXON)

View Comments and Join the Discussion!

Posted-In: Alzherimer's Chardan Gbola Amusa RVT-101Analyst Color Price Target FDA Analyst Ratings

Latest Ratings

StockFirmActionPT
HYMCBMO CapitalInitiates Coverage On
DEMorgan StanleyMaintains335.0
SBNYRaymond JamesMaintains138.0
CORTHC Wainwright & Co.Maintains32.0
CYBBFCitigroupDowngrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com