The U.S. Food and Drug Administration’s approval early last month of Biogen’s Alzheimer’s disease therapy Aduhelm stunned investors—and left them hurrying to rethink their other bets across biotech.
In a note out early Wednesday, Maxim Group analyst Jason McCarthy increased his target prices on three Alzheimer’s disease stocks, arguing that the approval of Aduhelm is “driving a re-calibration of Alzheimer’s players.”
McCarthy increased his target price on Annovis Bio (ticker: ANVS), which closed Tuesday at $102.98, to $150. His previous target on the stock was $45. He increased his target on INmune Bio (INMB), which closed Tuesday at $17.85, to $42, up from his previous target of $32.
And he increased his target on Cassava Sciences (SAVA), which closed Tuesday at $92.80, to $190, from his previous target price of $80.
All three of the companies are developing Alzheimer’s treatments, and all have climbed sharply in recent weeks. Annovis shares are up 128% since the beginning of June, while INmune shares are up 32%, and Cassava shares are up 72%. The iShares Biotechnology exchange-traded fund (IBB), which tracks the biotech industry, is up just 7.2% over the same period.
“Aducanumab’s approval, if for nothing else, has ushered in new hope, new enthusiasm, new investment, and a new path forward in AD drug development,” McCarthy wrote in his Wednesday note. “In our opinion, this is what is driving valuations being re-calibrated across the space.”
The Aduhelm decision shocked investors and researchers alike, given the widespread skepticism over the data supporting the drug’s efficacy. Enthusiasm for Alzheimer’s stocks has grown quickly in the subsequent weeks, as investors have placed bets under the assumption that the FDA will use the same approach on other Alzheimer’s therapies as it did on Biogen’s (BIIB).
Shares of Eli Lilly (LLY) have climbed sharply since Aduhelm’s approval. The company now says that it plans to submit its own Alzheimer’s disease therapy for approval this year, rather than waiting for the completion of a second Phase 3 trial, as it had previously planned. Lilly shares are now up 17% since Aduhelm was approved on June 7, nearly as much as Biogen itself, which is up 21%.
In his note, McCarthy said that Cassava, Annovis, and INmune are undervalued, even though their share prices have shot up this year. New data is expected from all three of the companies.
INmune shares were up 8.2% in recent trading, while Annovis shares were up 0.6% and Cassava shares were up 3.4%.
Write to Josh Nathan-Kazis at [email protected]
