Leerink starts AC Immune at OP; PT $18

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Leerink Partners initiated coverage of AC Immune (NASDAQ:ACIU) with an “outperform” rating and price target of $18. The stock closed at $9.65 on Nov. 15.

AC Immune develops medicines and diagnostic tools for neurodegenerative diseases driven by protein misfolding.

Analyst Marc Goodman writes that AC Immune has a diversified pipeline of drug candidates and diagnostics for Alzheimer’s disease (AD) led by a late-stage antibody, crenezumab.

The company also has strong partners, which helps to validate the projects, fund clinical development of the expensive programs as well as commercialize the products, which would result in solid royalty streams if successful, he added.

AC Immune’s partners include Roche for crenezumab; J&J for an anti-Tau vaccine; Biogen for an alpha-synuclein-PET tracer diagnostic; and Life Molecular Imaging for a Tau-PET tracer diagnostic.

Mr. Goodman said upcoming catalysts include a Phase 1b interim data analysis for ACI-24 in Down syndrome in the fourth quarter of 2018; preclinical lead selection data for alpha-synuclein antibodies in AD, also this year; Phase 3 CREAD 1 data for crenezumab in AD in 2020; and Phase 3 CREAD 2 data for crenezumab in AD in 2021.

AC Immune also has two proprietary drug discovery platforms, one for antibodies and the other for small molecules, and a strong knowledge of neurodegenerative disease that should enable the company to keep putting new products into the pipeline, he added.

Stephen Kilmer