JP Morgan starts Orchard Therapeutics at OW; PT $25

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JP Morgan launched coverage of Orchard Therapeutics (NASDAQ:ORTX) with an “overweight” rating and December 2019 price target of $25. The stock closed at $16.75 on Nov. 22.

Analyst Anupam Rama writes that Orchard, in a very short period of time, has evolved into a late-stage gene therapy company for rare diseases that have limited therapeutic options, and with commercialization potential in the next two-to-three years.

Mr. Rama cited the “de-risked nature” of Orchard’s top-3 programs, including OTL-101 in adenosine deaminase-deficient severe combined immunodeficiency; OTL-103 in Wiskott-Aldrich syndrome; and OTL-200 in metachromatic leukodystrophy. He expects Orchard to file BLA applications for the trio in the 2020-21 timeframe.

Mr. Rama said a key point of differentiation with the Orchard approach is the development of a cryopreservation process across the pipeline that effectively lengthens their shelf-live from months to years, enabling broad distribution of products.

“While we acknowledge there is a wide range for peak potential across product lines (ranging from about $100-million to $900-million-plus), we do believe that in aggregate, the company’s product portfolio has a multi-billion dollar potential (in the $2-billion to $3-billion range at peak),” he added.

Stephen Kilmer