Ladenburg starts Flex Pharma at buy; PT $12


Ladenburg Thalmann initiated coverage of Flex Pharma (NASDAQ:FLKS) with a “buy” rating and $12 price target. The stock closed at $4.02 on Jan. 24.

Flex is leveraging its research in muscle cramping as a disorder of hyperactive motor neurons to develop FLX-787, a novel therapy that addresses this symptom in Charcot-Marie-Tooth disease (CMT) and amyotrophic lateral sclerosis (ALS), as well as multiple sclerosis spasticity (MS).

“In our view, 2016’s failures in nocturnal leg cramps (NLC) were driven by trial design, conduct and patient selection, rather than FLX-787’s activity, which we believe will be more evident in ongoing parallel and cross-over trials with longer washout periods,” writes analyst Michael Higgins.

“We encourage investors to take advantage of what we believe is an oversold stock waiting for a catalyst since the 3Q 2016 NLC data,” he added.

Given FLX-787’s market potential, Mr. Higgins said he views 2018 as a transformational year for Flex with Phase 2 results in MS (1Q 2018), ALS and CMT (3Q 2018).”