HCW starts Concert at buy

H.C. Wainwright initiated coverage of Concert Pharmaceuticals (NASDAQ:CNCE) with a “buy” rating and $20 price target. The stock closed at $16.10 on July 24.

Concert’s deuteration technology is a de-risked platform for drug discovery with a lead clinical asset for alopecia areata. The company also has leveraged its proprietary platform as a source for external partnerships and internal de-risked R&D efforts, writes analyst Andrew Fein. 

In the past five years, Concert has had four validating partnership deals, including the recently announced acquisition of CTP-656, deuterated Kalydeco, by Vertex Pharmaceuticals that is currently under FTC review before the final close date in October. 

“While we have little clarity into the review process itself, we believe in the fundamental value of a deuterated potentiator to the many players still eager to assemble the best-in-class triple combo for cystic fibrosis,” Mr. Fein said. 

In addition to partnerships, he said the company’s internal efforts to develop CTP-543 as an oral JAK 1/2 inhibitor in the treatment of alopecia areata also represents upside to value. 

“In spite of the scarcity of near-term data catalysts, we are bullish on the long-term potential of CTP-543 in alopecia areata, the potential of the partnered AVP-786 for Alzheimer’s disease agitation, as well as continued M&A efforts to partner CTP-656 regardless of outcome from Vertex,” he added.