Market Overview

Newly Public Gene Therapy Biotech Avrobio Picks Up 2 Sell-Side Bulls

Newly Public Gene Therapy Biotech Avrobio Picks Up 2 Sell-Side Bulls
The Week Ahead: Apple And Tesla Earnings, FOMC Meeting, Sonos IPO
60 Biggest Movers From Yesterday
FDA and NIH to loosen oversight of gene therapy development (Seeking Alpha)

Avrobio Inc (NASDAQ: AVRO), a developer of gene therapy drugs targeting rare lysosomal storage disorders such as Fabry disease, Gaucher disease, Pompe disease and cystinosis, recently offered 5.25 million shares in an IPO.

With the analyst quiet period expiring, the sell-side began initiating coverage of the biotech stock. 

The Thesis

Morgan Stanley analyst David Lebowitz initiated coverage of Avrobio with an Overweight rating and $37 price target.

Wedbush analyst David Nierengarten initiated coverage of Avrobio with an Outperform and $38 price target.

Morgan Stanley: A Multibillion-Dollar Revenue Opportunity

Avrobio's platform appears "promising and relatively derisked" compared to typical gene therapy companies at a similar stage, Lebowitz said in the Monday note. 

The company joins a rare group of gene therapy companies that boast human clinical data at the time of their IPO, the analyst said. 

Avrobio's therapies offer a potential "one-and-done cure"  at a lower price than existing standard-of-care therapies; the efficacy is "fair-to-subpar at best," Lebowitz said.

"Collectively, AVROBIO's drugs provide a multibillion-dollar revenue opportunity," the analyst said. 

Given that Avrobio owns global commercial rights for all its pipeline therapies, the company owns all downstream revenues, according to Morgan Stanley. 

Over time, Lebowitz projects Avrobio will extend its lentivirus approach to other areas such as immuno-oncology and non-rare diseases.

Wedbush Sees Significant Upside Potential

The shares of Avrobio could hold substantial upside potential, as the company's therapies target rare disorders that are poorly controlled by current treatments, Wedbush's Nierengarten said in a Monday initiation note. 

Reviewing the company's pipeline program, the analyst said AVR-RD-01 is in early- to mid-state studies in patients with Fabry disease. Avrobio's Gaucher disease and cystinosis programs are likely to enter clinical trials in 2019, and the Pompe disease candidate remains in preclinical development, the analyst said. 

The Price Action

Since listing on the Nasdaq June 21, Avrobio shares have lost about 10 percent.

Related Links:

The Week Ahead In Biotech: Conferences, Clinical Trial Results, IPOs And More

Advaxis Shares Soar After FDA Lifts Clinical Hold On Cancer Drug

Latest Ratings for AVRO

Aug 2018Morgan StanleyMaintainsOverweightOverweight
Jul 2018Wells FargoInitiates Coverage OnOutperform
Jul 2018Cowen & Co.Initiates Coverage OnOutperform

View More Analyst Ratings for AVRO
View the Latest Analyst Ratings

Posted-In: Analyst Color Biotech Price Target Initiation Top Stories Analyst Ratings Trading Ideas General Best of Benzinga


Related Articles (AVRO)

View Comments and Join the Discussion!

Upcoming Earnings: Netflix To Report Monday, Subscriber Growth A Focus

This Day In Market History: Nasdaq 2000