Roth starts CollPlant at buy; PT $7

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Roth Capital Markets launched coverage of CollPlant Holdings (NASDAQ:CLGN) with a “buy” rating and 12-month price target of $7. The stock closed at $4.36 on Dec. 17.

CollPlant is the world’s first and only commercial provider of recombinant human collagen produced from plants. Collagen is the most common protein found in all connective tissue, and the company has developed a proprietary method of producing and extracting recombinant human collagen (rhCollagen) from tobacco plants in a cost effective manner, writes analyst Swayampakula Ramakanth.

“Compared with animal- and cadaver-derived collagens available on the market, rhCollagen has significant advantages, with no reported immunogenicity and a lower risk of contamination,” he added. “rhCollagen has also demonstrated superior physical properties, such as higher solubility, better stability, and higher fiber organization, compared with natural collagen.”

CollPlant has two rhCollagen products that have received CE mark approval in the EU: VergenixFG for the treatment of chronic wounds and VergenixSTR for the treatment of tendonitis. The company plans to meet with the FDA to discuss the regulatory pathway for VergenixSTR to the U.S., and “we expect to hear an update in early 2019,” he added.

Mr. Ramakanth said CollPlant’s rhCollagen also has numerous applications across wound healing, cosmetics and artificial organs, and has the “potential to become the collagen of choice in these multi-billion dollar fields.”

Abby Hardy