Stifel starts GTx at buy; PT $16

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Stifel initiated coverage of GTx (NASDAQ:GTXI) a “buy” rating and $16 price target. The stock closed at $7.51 on Nov. 8.

“We believe the Street is overlooking blockbuster potential for lead pipeline asset, enobosarm, in treating postmenopausal women with stress urinary incontinence (SUI) - an enormous indication with no FDA approved drugs,” writes analyst Adam Walsh.

He said enobosarm is the only drug currently in clinical development for SUI and recent Phase 2 proof-of-concept results showed the drug to be remarkably effective with good safety.

A randomized Phase 2 placebo-controlled trial is now underway with results expected by the end of 2018, and “we and our key opinion leader consultants are optimistic on chances for success,” Mr. Walsh said.

“With an enterprise value of less than $200-million, a wholly-owned potential blockbuster asset and a recently fortified balance sheet sufficient through Phase 2 data, we see an excellent risk/reward opportunity in GTx shares at current levels,” he added.