TD Cowen starts Amylyx stock coverage with Buy rating

On Friday, TD Cowen initiated coverage of Amylyx Pharmaceuticals Inc. (NASDAQ: AMLX) with a Buy rating. The research firm’s analyst cited optimism for the company’s lead asset, avexitide, which is currently being developed for post-bariatric hypoglycemia (PBH). The confidence stems from positive Phase II data and the anticipation of success in Phase III trials. The company’s stock, currently trading at $4.90, has shown remarkable momentum with a 191.67% return over the past year. According to InvestingPro data, analysts have set price targets ranging from $8 to $16, suggesting significant upside potential.

The analyst at TD Cowen highlighted the potential market uptake of avexitide for treating PBH, considering the drug’s previous trial outcomes. They believe that the current valuation of Amylyx shares does not fully reflect the drug’s prospects in this indication. Based on InvestingPro’s Fair Value analysis, the stock appears to be fairly valued at current levels. Moreover, the analyst noted that successful outcomes of the company’s other pipeline candidates, AMX0035 for Wolfram syndrome and progressive supranuclear palsy (PSP), as well as AMX0114 for Amyotrophic Lateral Sclerosis (ALS), could further drive the stock’s performance. The company maintains a strong financial position with a healthy current ratio of 12.05 and a defensive beta of -0.6.

The coverage initiation by TD Cowen is based on several key opinion leaders (KOLs) who share the firm’s positive outlook for avexitide’s Phase III success. These KOLs’ perspectives, coupled with the analyst’s assessment, suggest a promising future for the drug’s clinical development and its impact on the company’s growth.

The analyst’s comments underscore the potential undervaluation of Amylyx shares given the prospects of avexitide in the treatment of PBH. This optimism is rooted in the efficacy demonstrated in earlier Phase II trials, which the analyst believes could translate into successful Phase III results and subsequent market adoption.

Amylyx Pharmaceuticals Inc.’s focus on developing treatments for rare neurological disorders has positioned it as a company to watch in the biopharmaceutical sector. The initiation of coverage by TD Cowen with a Buy rating reflects the firm’s belief in the company’s lead asset and its pipeline’s ability to enhance shareholder value.

In other recent news, Amylyx Pharmaceuticals has announced several key developments that could impact investor sentiment. The company has initiated a Phase 3 clinical trial for avexitide, a treatment for post-bariatric hypoglycemia (PBH), with the first participant dosed earlier this week. This trial, named LUCIDITY, will evaluate the safety and efficacy of avexitide across multiple sites in the United States, with topline data expected in the first half of 2026. Additionally, Amylyx has reported positive 48-week data from its Phase 2 HELIOS trial for AMX0035, targeting Wolfram syndrome, showing sustained improvements in disease progression markers.

Analyst firms have also weighed in on Amylyx’s prospects. H.C. Wainwright raised its price target for Amylyx shares from $12.00 to $16.00, maintaining a Buy rating, driven by the ongoing trial for avexitide and the significant unmet need it addresses. Mizuho (NYSE:MFG) upgraded Amylyx’s stock rating from Neutral to Outperform, doubling its price target to $7.00. This upgrade reflects confidence in Amylyx’s research and development pipeline, particularly for avexitide and AMX0035, and the firm’s strategic focus on these treatments.

These developments underscore Amylyx’s commitment to addressing diseases with high unmet needs, as evidenced by its ongoing trials and analyst upgrades. The company has also stated that it expects its cash runway to extend through the end of 2026, supporting its continued research efforts. Investors will likely keep a close watch on the progress of Amylyx’s clinical trials and the potential market impact of these treatments.

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