HCW starts Bellerophon Therapeutics at buy

H.C. Wainwright initiated coverage of Bellerophon Therapeutics (NASDAQ:BLPH) with a “buy” rating and price target of $5. The stock closed at 67 cents on Jan. 20.

Bellerophon develops products for the treatment of cardiopulmonary diseases. Its research focus is on nitric oxide therapy for patients with pulmonary hypertension (PH) using its proprietary delivery system, INOpulse.

“Our thesis is a simple one: inhaled nitric oxide works for pulmonary arterial hypertension (PAH), a rare disorder characterized by high blood pressure in the arteries of the lung, and the convenience of Bellerophon’s INOpulse device enables ready expansion beyond the acute hospital setting,” writes analyst Andrew Fein.

Despite being a known potent vasodilator, he said nitric oxide therapy has thus far been limited by the need for continuous inhalation due to its short half-life and need for special delivery devices.

“We believe Bellerophon’s portable, user-friendly device, INOpulse, offers a competitive value proposition as adjuvant therapy for PAH patients already on long-term oxygen support,” Mr. Fein said.

“We take a reductionist approach here and argue that despite the business development potential of INOpulse in the larger indications – pulmonary hypertension-chronic obstructive pulmonary disease (PH-COPD) and pulmonary hypertension-idiopathic pulmonary fibrosis (PH-IPF) - a price target of $5 a share can be fully supported by INOpulse in PAH alone,” he added.

In addition, Mr. Fein noted that readouts from the company’s two Phase 2 studies of INOpulse in PH-COPD and PH-IPF are on tap for the first half this year and “may offer additional upside, as well as an interim readout from the Phase 3 INO-1 of INOpulse in PAH on tap for yearend 2017.”