Analysts See Potential In The NuCana Pipeline

Jefferies and Citigroup initiated coverage for NuCana PLC (ADR) NCNA Monday with a Buy rating and a price target of $25 and $23 respectively.

Jefferies' analysts Eun Yang and Carmen Augustine explained that the company is focused on developing safer and more potent chemotherapies for cancer and due to its broadly applicable ProTide platform, they believe the success of one product could translate into the success of other products, which could lead to a significant upside.

Its lead product is Acelarin and a successful phase 3 for the product could lead to a significant revision in valuation, believe analysts. The risks for their thesis include a potential phase 3 delay or failure for ovarian and/or pancreatic cancer, distant profitability, potential financing risks and competition.

Yigal Nochomovitz of Citigroup thinks NuCana's technology platform produces improved versions of decades-old chemo drugs, with very limited innovation risk and higher than average success probability in clinical development. The analyst thinks the company is going to have a lot of catalysts in 2018 as it transitions into a late-stage development company.