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On Tuesday, Cantor Fitzgerald reaffirmed its positive stance on Aardvark Therapeutics Inc (NASDAQ:AARD), maintaining an Overweight rating and a $50.00 price target for the company’s shares. Currently trading at $7.51, the stock has significant upside potential according to analyst consensus, with price targets ranging from $21 to $50. InvestingPro analysis shows the company maintains a FAIR financial health score of 2.02 out of 5. The endorsement follows recent developments in the treatment landscape for Prader-Willi Syndrome (PWS), marked by the approval of a competing drug.
Last week, the pharmaceutical sector observed a significant milestone with the FDA’s approval of VYKAT XR, developed by Soleno Therapeutics (NASDAQ:SLNO), as the first medication to address hyperphagia related to PWS. Despite this new entry, Cantor Fitzgerald’s analysis suggests that the market could support multiple therapies aimed at this condition. They speculate that Aardvark’s ARD-101 could potentially be administered in conjunction with VYKAT XR.
The firm’s analysts pointed to the stark contrast in market capitalization between Soleno Therapeutics at $3.3 billion and Aardvark Therapeutics at $204.8 million, indicating a market-implied probability of success (POS) for Aardvark’s ARD-101 that they believe undervalues the drug’s potential. InvestingPro data reveals the company holds more cash than debt and maintains strong liquidity with a current ratio of 31.65. They estimate the POS for ARD-101 to be significantly higher, in the range of 75-80%.
Looking forward, Cantor Fitzgerald is organizing a series of webinars in the weeks of April 21 and April 28. These webinars are set to feature patient advocacy groups, key opinion leaders (KOLs), and representatives from both Aardvark Therapeutics and Soleno Therapeutics, aiming to foster discussion and provide insights into PWS treatments.
Investors are advised to keep an eye on the upcoming phase 3 readout for ARD-101, which is anticipated in early 2026. According to the firm, the current valuation gap presents an opportunity, and they suggest that investors consider buying into Aardvark Therapeutics ahead of the trial results. The stock has experienced significant pressure, down 47.52% over the past six months. Subscribers to InvestingPro can access 8 additional key insights about AARD’s financial health and market position to make more informed investment decisions.
In other recent news, Aardvark Therapeutics has garnered significant attention with several analyst updates and insights into its ongoing projects. The company is currently developing ARD-101, a treatment for Prader-Willi Syndrome (PWS), which lacks FDA-approved treatments. BofA Securities recently raised its price target for Aardvark Therapeutics to $26, maintaining a Buy rating, citing the potential robustness of the company’s phase 3 trial data. RBC Capital initiated coverage with an Outperform rating and a $21 price target, expressing optimism about the company’s prospects in the PWS market. Meanwhile, Morgan Stanley (NYSE:MS) provided an Overweight rating with a price target of $29, highlighting the potential of ARD-101 and its favorable safety profile observed in early studies. Analysts from these firms underscore the significant unmet medical needs Aardvark Therapeutics aims to address with its drug development programs. The company is also exploring applications for ARD-101 in treating hypothalamic obesity and broader obesity conditions. These developments have positioned Aardvark Therapeutics as a company to watch in the biotechnology sector.
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