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Wedbush Projects Limited Upside For Arbutus Shares This Year, Moves To Sidelines

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Wedbush Projects Limited Upside For Arbutus Shares This Year, Moves To Sidelines

While Wedbush predicts Arbutus Biopharma Corp (NASDAQ: ABUS) shares will appreciate over the next six-to-12 months amid clinical data readouts, the sell-side firm stepped to the sidelines following the Canadian biopharma company's fourth-quarter print and and expectations of limited near-term upside. 

The Analyst

Wedbush analyst Robert Driscoll downgraded shares of Arbutus from Outperform to Neutral and lowered the price target from $9 to $6.

The Thesis

Key data for the ‘1467 triple combo regimen is not likely to arrive until the second quarter of 2019, Driscoll said in a Monday  note.

The Phase 2 combination study of ARB-1467 is set to initiate this quarter, with responder data due in the second half of 2018, the analyst said. 

"We have pushed back our estimate of likely approval for an effective add-on to current therapy, such as ‘1467, for ABUS to 2022 (from mid-2020), and hence our price target is reduced to $6 (from $9)," the analyst said.

Wedbush is positive long-term on Arbutus' ability to leverage its multicomponent pipeline and strong research capabilities to develop effective treatments for the hepatitis B virus. 

An investigational new drug application filing for AB-506 is likely in mid-2018, with Phase 1 data on healthy volunteers likely to be read out in 2018, Driscoll said. Wedbush expects an IND or CTA filing for AB-452 — a potent small molecule HBV RNA destabilizer with potential for oral dosing — to be completed in mid-2018. The asset is expected to enter Phase 1 studies in the third quarter, Driscoll said. 

The Price Action

Arbutus shares are up about 49 percent over the past year.

Arbutus shares were down 3.8 percent at the time of publication Monday.

Related Links:

The Week Ahead In Biotech: Earnings, PDUFA Dates And More

7 Biotech Stocks With Clinical Trial Outcomes In March

Latest Ratings for ABUS

DateFirmActionFromTo
Jul 2020BairdDowngradesOutperformNeutral
May 2020WedbushUpgradesNeutralOutperform
Mar 2020BairdMaintainsOutperform

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