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On Monday, Morgan Stanley (NYSE:MS) research analysts initiated coverage of Aardvark Therapeutics Inc (NASDAQ:AARD), a clinical-stage biotechnology company. The firm issued an Overweight rating on the company’s stock, along with a price target of $29.00 - representing significant upside from the current trading price of $10.13. According to InvestingPro data, the stock has faced headwinds recently, declining over 20% in the past week. Aardvark Therapeutics specializes in developing small molecules aimed at treating metabolic disorders related to hunger, such as obesity and conditions linked to excessive hunger.
The company’s leading product, ARD-101, is designed to target bitter taste receptors (TAS2R) to treat obesity and related conditions, including hyperphagia, Prader-Willi syndrome (PWS), and hypothalamic obesity (HO). ARD-101 has demonstrated a favorable safety and tolerability profile, along with signs of meaningful clinical activity in a small open-label Phase 2 study in patients with PWS. InvestingPro analysis shows the company maintains a strong liquidity position with a current ratio of 31.65 and more cash than debt on its balance sheet, providing runway for its clinical development programs.
Morgan Stanley’s coverage note highlighted the potential of ARD-101, with expectations that Phase 3 data expected in early 2026 will confirm its efficacy in PWS and contribute to significant value growth for the company. The analysts also noted the possibility of ARD-101 being used for additional indications such as HO, and the broader potential in the obesity market with ARD-201, a fixed-dose combination of ARD-101 and a DPP-4 inhibitor.
The initiation of coverage and the positive outlook from Morgan Stanley come as Aardvark Therapeutics continues to progress in its clinical trials, aiming to address significant unmet medical needs in the treatment of metabolic disorders. The Overweight rating reflects the firm’s confidence in Aardvark’s lead asset and its potential to drive meaningful upside for the company.
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