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On Wednesday, Oppenheimer began coverage of Abeona Therapeutics (NASDAQ:ABEO), currently trading at $5.07 with a market capitalization of $220.4 million, with an Outperform rating and a price target of $16.00. According to InvestingPro data, analyst consensus is strongly bullish, with price targets ranging from $9.50 to $21.00. The firm’s analysis is based on the prospects of ABEO’s leading product candidate, pz-cel, which is a genetically engineered autologous skin sheet designed to treat RDEB, a severe and rare skin disease known for causing large wounds and blistering.
The optimism surrounding the stock is partially due to the upcoming PDUFA date set for April 29, 2025. Oppenheimer’s analysts have expressed confidence in the potential resolution or approval of pz-cel, following a Complete Response Letter (CRL) from the FDA dated April 22, 2024. InvestingPro analysis shows the company maintains strong liquidity with a current ratio of 6.12 and holds more cash than debt on its balance sheet, though it is currently burning through cash rapidly. The CRL addressed issues related to Chemistry, Manufacturing, and Controls (CMC), but notably, it did not raise any concerns regarding the safety or efficacy of the product.
The entry of a competitor, Krystal Biotech (NASDAQ:KRYS)’s Vyjuvek, a weekly topical gel, into the RDEB market may raise some concerns. However, Oppenheimer’s analysts believe that Vyjuvek’s presence has actually helped validate the market and increase awareness of the condition. Furthermore, they argue that the two therapies could be seen as complementary, especially since pz-cel has shown differentiation in treating larger wounds with immediate and durable closure, according to Key Opinion Leaders (KOLs).
The report also suggests that Abeona Therapeutics is positioned attractively in the market, especially with an imminent resolution to the CRL likely to be aided by a priority voucher. This potential development has influenced Oppenheimer’s positive outlook on the stock and its decision to initiate coverage with a high price target. Based on InvestingPro’s Fair Value analysis, the stock appears to be overvalued at current levels. Discover more insights and 5 additional ProTips, along with comprehensive financial analysis, in the exclusive Pro Research Report available to subscribers.
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