Ladenburg starts Aptevo Therapeutics at buy; PT $14


Ladenburg Thalmann initiated coverage of Aptevo Therapeutics (NASDAQ:APVO) with a “buy” rating and $14 price target. The stock closed at $3.63 on Nov. 2.

Aptevo is developing biotherapeutics for oncology and autoimmune /inflammatory diseases (AIID). It has developed a proprietary homodimer bispecific therapeutics platform, ADAPTIR. The company was spun off from Emergent BioSolutions directly into a NASDAQ-listed company through a Form 10 in 2016.

Analyst Wangzhi Li writes that Aptevo’s wholly-owned pipeline of three oncology products includes otlertuzumab (aCD37 antibody); APVO414 (aPSMAxCD3 T-cell engager); and APVO436 (aCD123xCD3 T-cell engager) in Phase 1-2 trials for peripheral T-cell lymphoma, metastatic castration-resistant prostate cancer and AML/MDS.

It also has one AIID product, APVO210 (aCD86xIL-10 for targeted delivery of IL-10 to suppress CD86+ APCs), to enter Phase 1 development for psoriasis/inflammatory bowel disease in 2019.

Mr. Li said clinical data from the four programs are expected in the fourth quarter of 2018 and 2019. APVO also sells a fully-owned drug, IXINITY, for hemophilia B with projected revenue of about $25-million for 2018, he added.

“We believe Aptevo is under-recognized and currently traded at an undervalued market cap of about $82-million,” with $57.6-million in cash, Mr. Li said. “We believe Aptevo presents an attractive investment opportunity, with relatively reduced downside risk, but significant upside potential with multiple near-term catalysts.”

Stephen Kilmer