Piper Sandler has reiterated its Overweight rating on shares of MeiraGTx Holdings plc (NASDAQ: MGTX) with a steady price target of $26.00.
The firm's confidence in the biotechnology company is based on several near-term catalysts that are believed to be overlooked by the market.
Despite a significant year-to-date decline in the stock price, Piper Sandler sees an attractive entry point for investors due to the company's current enterprise value of approximately $243 million and the potential for a substantial milestone payment.
MeiraGTx's partnership with Johnson & Johnson could yield a $285 million milestone payment upon the first commercial sale of AAV-RPGR, a gene therapy product, next year. This anticipated milestone is a key factor in the firm's valuation assessment and optimistic outlook for the stock.
In addition to the expected milestone from Johnson & Johnson, MeiraGTx has other potential catalysts on the horizon. Piper Sandler points out that the market may not fully appreciate upcoming data events. One such event is the bridging data for AAV-GAD, a gene therapy for Parkinson's disease, which is expected by the end of 2024. The firm suggests that this could be a driver for the stock in the shorter term.
Moreover, looking further ahead, pivotal data for AAV hAQP1, aimed at treating xerostomia or dry mouth, is anticipated in the second half of 2025. These forthcoming events, along with what Piper Sandler considers to be a compelling valuation, form the basis for the firm's recommendation for investors to buy MeiraGTx shares.
In other recent news, MeiraGTx Holdings has been the subject of several financial analyses. RBC Capital adjusted its price target for the company to $9.00, down from the previous $11.00, maintaining an Outperform rating. This revision followed MeiraGTx's second-quarter results and the announcement of a $50 million equity financing deal at $4 per share, led by a $30 million investment from Sanofi (NASDAQ:SNY).
The company has also been in discussion with the FDA about its treatment for xerostomia and anticipates pivotal trial results later this year for its treatment of X-linked retinitis pigmentosa. Additionally, MeiraGTx is progressing in its efforts to treat Parkinson's disease, with Phase I data expected in the fourth quarter of 2024.
Furthermore, MeiraGTx announced a public offering of 12.5 million ordinary shares at $4 each, expecting to generate $50 million in gross proceeds. The proceeds from this offering are intended for general corporate purposes, including research and development expenses and clinical trial costs.
Simultaneously, Chardan Capital Markets initiated coverage on MeiraGTx with a Buy rating and a price target of $36.00, citing confidence in the company's gene therapy pipeline. Lastly, MeiraGTx is set to release pre-clinical data for its riboswitch platform later this year, which has applications in obesity and CAR-T therapies.
InvestingPro Insights
Recent data from InvestingPro provides additional context to Piper Sandler's optimistic outlook on MeiraGTx Holdings plc (NASDAQ:MGTX). While the company's market cap stands at $311.92 million, InvestingPro Tips highlight that MGTX is "quickly burning through cash" and "not profitable over the last twelve months." This aligns with the article's mention of the company's current enterprise value and the importance of potential milestone payments.
The InvestingPro Fair Value for MGTX is estimated at $5.11, which is significantly lower than Piper Sandler's price target of $26.00. However, it's worth noting that analysts' fair value target is even higher at $20.00, suggesting a potential upside that corresponds with the article's positive outlook.
Despite the company's financial challenges, InvestingPro Tips indicate that MGTX "operates with a moderate level of debt" and "liquid assets exceed short term obligations." These factors could provide some financial stability as the company works towards its near-term catalysts.
For investors considering Piper Sandler's recommendation, it's important to note that InvestingPro offers 9 additional tips for MGTX, which could provide further insights into the company's financial health and market position.
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