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Analysts Initiate Bullish Coverage Of Prevail Therapeutics

Analysts Initiate Bullish Coverage Of Prevail Therapeutics

Prevail Therapeutics Inc (NASDAQ: PRVL) shares traded higher on Monday after a pair of Wall Street analyst initiated bullish coverage of the stock.

The Analyst

Bank of America analyst Tazeen Ahmad initiated coverage of Prevail with a Buy rating and $15 price target.

The Thesis

Ahmad said Prevail’s leading asset PR001 has a potentially large indication for treating Parkinson’s via disease-modifying therapy. PR001 could also potentially be the first therapy ever approved for treatment of neuronopathic Gaucher disease. In addition, Ahmad said PR006 for frontotemporal dementia and PR004 for synucleinopathies are also potential sources of long-term value creation for Prevail investors.

All of Prevail’s gene therapy treatments utilize the AAV9 vector, the same vector used by Zolgensma, which was approved by the FDA earlier this year.

Bank of America is modeling $251 million in peak global sales for PR001 in treatment of Gaucher, which Ahmad said will likely be Prevail’s first approved indication. Looking ahead, Ahmad said Parkinson's is a much larger opportunity, with a peak un-risk-adjusted annual sales estimate of $6 billion.

Ahmad said the Parkinson’s program represents more than half the value of her price target for Prevail. Investors should understand the many risks involved in investing in these types of biotech stocks, and Ahmad said Prevail is no exception.

“Risks to our estimates are a failure of the PD program to reach commercialization, lower price for PD than what we model ($500K per pt in US) and challenges in reaching commercial stage supply for its gene therapy programs,” Ahmad wrote in the note.

The Analyst

Wedbush analyst Laura Chico also initiated coverage of Prevail with an Outperform rating and $25 price target.

The Thesis

Chico said Prevail’s strategy of correcting GBA1 mutations to improve lysosomal dysfunction holds scientific merit and has tremendous potential value.

“We eagerly await proof-of-concept data with lead agent PR001 in GBA-associated Parkinson's disease (2020), but note that the neuronopathic Gaucher disease (nGD) program could offer both a faster path to market for PR001, with potential launch as early as ~2022, as well as critical platform validation,” Chico wrote in a note.

She said Prevail offers a compelling risk-reward balance at its current valuation, and the company’s $214 million cash cushion gives it some financial wiggle room.

Wedbush is modeling for $467 million in annual revenue for Prevail by fiscal 2027.

Price Action

Prevail shares traded higher by 3.3% to $12 on Monday.

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Latest Ratings for PRVL

Jul 2019Initiates Coverage OnOutperform
Jul 2019Initiates Coverage OnBuy
Jul 2019Initiates Coverage OnOverweight

View More Analyst Ratings for PRVL
View the Latest Analyst Ratings

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