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On Friday, Cantor Fitzgerald reiterated its Overweight rating on 89bio Inc . (NASDAQ:ETNB) with a consistent price target of $29.00, significantly above the current trading price of $9.32. According to InvestingPro data, analysts maintain a strong buy consensus with price targets ranging from $12 to $49, suggesting substantial upside potential. The biopharmaceutical company recently reported its earnings and provided updated timelines for its three separate Phase 3 trials of pegozafermin, a treatment in development for certain liver and metabolic conditions.
89bio ended the previous year with a strong financial position, boasting $440 million in cash and cash equivalents. Further bolstering its resources, the company raised an additional $288 million earlier this quarter. InvestingPro analysis confirms the company’s solid liquidity position with a high current ratio of 11.66 and more cash than debt on its balance sheet, though it’s worth noting the company is quickly burning through cash. With a current market capitalization of $1.3 billion and a "Fair" overall financial health score, analysts at Cantor Fitzgerald have pointed out increasing investor interest in the company, noting the market capitalization discrepancy between 89bio and competitor Akero Therapeutics (NASDAQ:AKRO). They suggest that the similar timelines for Phase 3 studies could present a clear buying opportunity to narrow this market cap gap.
For the first time, 89bio has disclosed the expected timelines for the Phase 3 trial readouts for its drug candidate pegozafermin. Topline histology data from the trials in patients with F2-F3 and F4 fibrosis due to nonalcoholic steatohepatitis (NASH) are anticipated in the first half of 2027 and in 2028, respectively. The company intends to use these data to seek accelerated approval in the United States and European Union.
Cantor Fitzgerald’s analysts highlight the de-risked nature of the trials and suggest that patience could be rewarding for investors. In addition to the upcoming Phase 3 readouts for severe hypertriglyceridemia (SHTG), the analysts expect positive macro readouts in the space and a successful ongoing launch for Rezdiffra, another of the company’s products. Historical analysis of approximately 250 Phase 3 readouts over the past five years indicates that the most significant stock gains following positive outcomes typically occur when investments are made at least 12 months prior to the readout. Despite a recent 15.7% decline over the past week, InvestingPro data shows the stock is still up 19.2% year-to-date. Subscribers can access 6 additional ProTips and comprehensive financial metrics through InvestingPro’s detailed research report, helping investors make more informed decisions about this biotech opportunity.
In other recent news, 89bio, Inc. has announced a public stock offering aiming to raise $250 million, with the possibility for underwriters to purchase an additional $37.5 million in stock. The net proceeds from this offering are expected to be approximately $234.6 million, which the company plans to use for ongoing clinical trials, manufacturing costs, and general corporate expenses. This move is part of 89bio’s strategy to support the development of its lead drug candidate, pegozafermin. Leerink Partners has recently raised the stock target for 89bio to $37, citing optimistic data from a Phase 2b study on the company’s treatment for NASH, a liver disease. The study showed promising results, with significant benefits in fibrosis, which contributed to the analyst’s positive outlook. Additionally, 89bio’s CEO, Rohan Palekar, has been awarded 200,000 restricted stock units as part of the company’s retention strategy. These developments highlight 89bio’s active progress in its clinical endeavors and its efforts to retain key leadership.
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