The brokerage also set a price target of $17, implying a potential upside of 67 percent over Monday's close. On Tuesday, shares gaped open higher at $10.49 and have touched a new 52-week high of $11.33.
"Importantly, we feel gemcabene's oral formulation should enable pricing far below highly efficacious but expensive PCSK9 drugs, enabling meaningful uptake. Assuming positive data, we believe the drug could reach the US market in the broader cholesterol populations by 2020," analyst John Newman wrote in a note.
Gemcabene, which was licensed from Pfizer Inc. PFE, has shown no evidence of drug-drug interactions with statins at any statin dose level, which bodes well for the safety profile of the drug.
"Combination therapy with statins is critical since statins are the preferred therapy for high cholesterol and are generic. We believe that the ability to safely combine gemcabene with statins is also very important to FDA from a safety perspective, which we view as an advantage for the company," Newman added.
At time of writing, shares of Gemphire had climbed 11.45 percent on the day to $11.
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