Roth starts Forty Seven at buy; PT $28

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Roth Capital Partners initiated coverage of Forty Seven (NASDAQ:FTSV) with a “buy” rating and $28 price target. The stock closed at $12.49, up 34 cents, on May 28.

Forty Seven is an immuno-oncology company focused on developing novel checkpoint therapies that have an effect on immune cells called macrophages. Macrophages may be useful in fighting cancer as they can engulf and digest cancer cells through a process called phagocytosis. Digestion allows presentation of tumor-specific antigens that can activate T-cells against the cancer.

Analyst Tony Butler writes that the strategy of Forty Seven is to block a key signaling molecule overexpressed on cancer cells known as CD47. Blocking CD47 makes the tumor susceptible to macrophages, a component of the innate immune system.

Forty Seven’s lead product is an IgG4 antibody, known as 5F9, directed against CD47. “There is evidence suggesting that blocking the CD47 signaling pathway leads to the elimination of many types of tumors,” he said.

“5F9 has demonstrated promising activity in five Phase 1 trials in a variety of cancers, both as a monotherapy and in combination with other known cancer therapies,” he added.

Stephen Kilmer