Market Overview

Citi Sees Kadmon's Trials As 'Risky,' Initiates With Neutral Rating

Citi Sees Kadmon's Trials As 'Risky,' Initiates With Neutral Rating
The Week Ahead In Biotech: ASH Presentations Pick Up Pace, PDUFA Dates, Clinical Trials And IPOs
71 Biggest Movers From Friday

Citi has initiated coverage of Kadmon Holdings Inc (NYSE: KDMN) at Neutral, while its $12 price target represents a potential return of 20.4 percent over Friday's close.

Kadmon is a small-cap company with two major assets in development for cancer, psoriasis, fibrosis and kidney diseases.

However, Citi said most of these programs are risky with limited clinical data. In addition, the ongoing trials are small proof-of-concept (POC) trials, which could limit the upside.

"We believe investors could find a better de-risked entry point in the next 12–18 months with more data as we see long term upside," analyst Robyn Karnauskas wrote in a note.

Related Link: "Kadmon Offers A Diverse Clinical Pipeline, And Value Optionality," H.C. Wainwright Says

"While we note 40–100 percent upside if every POC trial works, the stock could trade at $3–$5/sh (50–70 percent downside) if Tesevatinib fails in cancer trials & could trade at cash ($1/sh) if KD-025 also fails due to safety," the analyst continued.

Karnauskas noted that the company may face cash crunch beyond first–second quarter of 2017 and they may be at risk of going to capital markets again before majority of data readout in the second half of 2017.

That said, the analyst is positive on the Tesevatinib cancer program, as it crosses the blood brain barrier.

"We see FV of this program at $9/sh (75 percent of our valuation) and model 35 percent probability to brain met NSCLC opportunity ($400 million peak unadjusted) and 25 percent probability to GBM opportunity ($800 million peak unadjusted)," Karnauskas highlighted.

At time of writing, shares of Kadmon were up 2.31 percent to $10.20.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Latest Ratings for KDMN

Oct 2017WBB SecuritiesDowngradesHoldSell
Aug 2016JefferiesInitiates Coverage onBuy
Aug 2016H.C. WainwrightInitiates Coverage onBuy

View More Analyst Ratings for KDMN
View the Latest Analyst Ratings

Posted-In: Analyst Color Biotech News Health Care Price Target Initiation Analyst Ratings General Best of Benzinga


Related Articles (KDMN)

View Comments and Join the Discussion!

Latest Ratings

PANWBMO CapitalUpgrades240.0
UAAGoldman SachsUpgrades28.0
GPSGoldman SachsDowngrades0.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Raytheon Granted A Maximum Of $104 Million Contract With U.S. Air Force

Lean Hog Futures Move Down