OncoMed Pharmaceuticals (OMED) has multiple early-stage cancer antibodies in its pipeline that are wholly owned or partnered with GlaxoSmithKline plc (GSK) and Bayer AG (FRA:BAYN) that could drive the stock to the upside by over 50%, says Ted Tenthoff, Managing Director and Senior Research Analyst at Piper Jaffray & Co.
“[OncoMed] was a recent IPO this year, and this company is also an antibody-development company or a biotherapeutic company, and they are developing cancer antibodies, and they presently have five early-stage cancer antibodies that are wholly owned and/or partnered with two of the leading pharmaceutical companies, GSK and Bayer. And the really — this is a company that went public at $17 in July, ran all the way up to $31 in its first-day trading, and it’s kind of settled back down around maybe even below that IPO price,” Tenthoff said.
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Although the company has a higher risk profile than average, Tenthoff says OMED has the potential to move back up to around $30 after revealing data at a large meeting in October that could validate the effectiveness of its oncology solution.
“Here I think the valuation is very attractive, trading around $0.5 billion, which for multiple antibodies in the clinic, again, it could represent — we have a $30 price target on it currently, which is over a 50% move, but I think they’re going to have some data at a big scientific meeting in October that could really validate their pipeline, and I think create a lot of value,” Tenthoff said.
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