HCW starts Foamix at buy

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H.C. Wainwright initiated coverage of Foamix Pharmaceuticals (NASDAQ:FOMX) with a “buy” rating and $12 price target. The stock closed at $4.53 on Aug. 23.

Analyst Raghuram Selvaraju writes that Foamix is a rapidly maturing specialty pharmaceuticals company with a proprietary technology platform focused on creating foam-based formulations for skin-based applications that “could become a leader in treating dermatological conditions.”

The company has two late-stage candidates including, FMX101, a 4% minocycline foam for moderate-to-severe acne, which is in a confirmatory third Phase 3 trial slated to report top-line data in mid-2018, and FMX103, a 1.5% minocycline foam candidate for moderate-to-severe papulopustular rosacea, being tested in two concurrently-enrolling Phase 3 trials that could also read out by mid-2018.

“We believe that the company, currently funded through these data releases and well into 2019, is substantially undervalued with a market cap of roughly $170-million and an enterprise value of less than $70-million,” he added.