Stifel ups Aratana Therapeutics to buy; PT to $8 from $6

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Stifel upgraded Aratana Therapeutics (NASDAQ:PETX) to “buy” from “hold” and raised its price target to $8 from $6, reflecting positive physician diligence on the company’s key products. The stock closed at $3.87 on March 26.

Aratana is focused on the licensing, development, and commercialization of pet therapeutics. The company’s portfolio includes Galliprant for osteoarthritis in dogs, which is sold by Elanco.

Analyst Jonathan Block writes that Aratana’s Entyce, which is the only FDA-approved therapeutic designed to safely and effectively stimulate appetite in dogs, is gaining early traction and “increases our conviction that Entyce will act as the main revenue driver to Aratana’s P&L in the coming years.” 

He figures that Galliprant alone is worth $2-to-$3 to Aratana’s stock price and as a result, Entyce can help drive appreciation from current levels.

In addition, he said Aratana’s portfolio, which contains three material new chemical entities, might be “appealing to a big animal health company looking to kick start top-line growth.”

Stephen Kilmer