Shares of ProQR Therapeutics NV PRQR have lost 48.2 percent year-to-date. Chardan Capital Markets’ Madhu Kumar initiated coverage of the company with a Neutral rating and a price target of $4.50. The analyst commented that following the underperformance, ProQR’s shares have limited downside potential, while upside potential is limited as well due to competition.
Clinical Catalysts Meet Competition
ProQR’s lead asset, QR-010, is currently in phase Ib/II clinical development and data is expected in mid/late-2016. “We particularly highlight competition from unrated Vertex, Nivalis, and Proteostasis, which have preclinical data as good as or superior to QR-010 and/or are significantly more advanced clinically,” analyst Madhu Kumar wrote.
Although there are concerns related to ProQR’s competitive position, shares have underperformed year-to-date, down 48.2 percent as of June 14, 2016, versus a 22.4 percent decline in the SPDR S&P Biotech ETF. Kumar believes that the “risk/reward dynamics are balanced ahead of upcoming clinical catalysts.”
“We assume a 25% probability of success (POS) for QR-010 (NPV €0.30/share). We value ProQR’s other pipeline programs at a NPV of €0.02/share, yielding an equity value per share of €3.98,” the analyst added.
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