Aimmune Analyst Says Palforzia Launch Funding Secured With Nestle's $200M Investment

Aimmune Therapeutics Inc AIMT recently received FDA approval for its peanut allergy drug Palforzia. 

The Aimmune Analyst

Baird analyst Brian Skorney maintained an Outperform rating on Aimmune with a $64 price target.

The Aimmune Thesis

With NESTLE S A/S ADR NSRGY Health Science's $200-million investment in Aimmune, the company is now adequately funded for the Palforzia launch, settling the bull-bear launch debate, Skorney said in a Thursday note. (See his track record here.)

The Nestle investment, along with Aimmune's existing cash and KKR credit facility, places more than $450 million at Aimmune's disposal, the analyst said.

"Given this significant liquidity, we do not believe the company will need to raise additional capital in the near-term, essentially eliminating the ability for shorts to cover through a financing," he said. 

With about 30% of the float short, Skorney said he sees the potential for a squeeze as some decide to cover rather than wait to see how the first couple quarters of Palforzia sales stack up against modest consensus expectation of $51.8 million for 2020.

Aimmune has announced an in-licensing deal with Xencor Inc XNCR for XmAb7195, an anti-IgE monoclonal antibody designed to rapidly clear from IgE circulation through three distinct mechanisms, according to Baird. 

The antibody, which has been renamed AIMab7195, will be tested in Phase 2 trials as an adjunctive therapy with some of Aimmune's select oral immunotherapy, including Palforzia.

Aimmune Price Action

The stock was down 4% at $29.07 at the time of publication Thursday.

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Photo courtesy of Aimmune.