HCW reiterates buy, ups Codexis PT to $22.50 from $16.50

buy-986524600.jpg

H.C. Wainwright raised its price target for Codexis (NASDAQ:CDXS) to $22.50 from $16.50 and reiterated its “buy” rating, saying food and next-generation sequencing products, along with new therapeutic candidates, are expected to drive growth. Shares of Codexis closed at $20.91 on Mar. 1.

Codexis engineers protein biocatalysts for the commercial manufacture of pharmaceuticals and fine chemicals. Nestle Health Science recently exercised its exclusive license option for Codexis’ CDX-6114, an oral therapeutic enzyme for the treatment of phenylketonuria, triggering a $3-million milestone payment.

HCW analyst Swayampakula Ramakanth expects that, in the next 12 months, Codexis will complete IND-enabling studies on two new independently developed products targeting diseases related to inborn errors of amino acid metabolism and lysosomal storage abnormalities. These could be out-licenced in 2019, and “in our view, Codexis is likely to follow the same licensing model as CDX-6114, which would bode well for the success of these development programs,” he said.

In addition, Ramakanth believes food products and next-generation sequencing products could be the company’s primary growth drivers in 2019 and 2020. Tasteva M, an artificial sweetener produced using Codexis’ enzyme was “well-received in its initial [July 2018] launch, and several food companies have started using it in pilot products. Moreover, this product category is expected to grow significantly over the next couple of years.”

Stephen Kilmer