Roth starts Verastem at buy; PT $12

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Roth Capital Partners launched coverage of Verastem (NASDAQ:VSTM) with a “buy” rating and $12 price target. The stock closed at $3.66 on Nov. 29.

Analyst Dr. Jotin Marango writes that his qualitative and quantitative bull thesis is focused exclusively on the in-licensed oral PI3K inhibitor, duvelisib.

“We believe that when stripped of its fatiguing corporate past and viewed objectively under conservative commercial assumptions, this NDA-ready asset unlocks value in excess of Verastem’s current $150-million market cap,” he said.

Dr. Marango cites three upcoming events important to bolstering investor confidence on duvelisib.

They include full chronic lymphocytic leukemia (CLL) data from the DUO pivotal study at ASH next week (top line data has already been released); an NDA filing likely in the first quarter of 2018, which, “in our view will make the CLL  and follicular lymphoma commercial proposition real in everyone’s eyes); and a potential partnership outside the U.S. in the first half of 2018 (“in our view, this will lend validation to the depth of  commercial prospects, while also de-risking an eventual launch to a certain degree.”)