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Heading To Phase III, This Pharma Stock Could Jump 30%

Nov. 02, 2017 8:53 PM ETImmunic, Inc. (IMUX)16 Comments


  • Following solid 2Q17 and 3Q17 earning results, we see Vital Therapeutics reaching nearly $8/share within the next 12 months.
  • Metabolic syndrome pharmaceuticals make for a very robust sub-sector, and we believe the Street is underestimating its potential.
  • Despite our optimism, we encourage the reader to be cognizant of a few key risks.

By Sean Alyeshmerni, DO

We find Vital Therapeutics (VTL) to be a good buy at its current market price of about $6.00/share, with a target price of $7.87 for the 12-month time frame, following solid 2Q17 and 3Q17 earning results. The catalyst for this Buy rating is that the Phase III VTL-308 has promising signs of success for being considered a respectable candidate for severe AAH (Acute Alcoholic Hepatitis), a condition on the rise without a gold standard treatment to date.

(Photo credit: massdevice.com)

Most recently, the Phase II trial has shown distinct survivability benefits for AAH, from 10% to 20% effective within a couple months of initiating therapy, in a sub-sector with one of the highest percentages (80%) of FDA-passed drug sectors. Vital anticipates a successful Phase III trial to be released by March 2018, while the rest of the Street continues to wait in anticipation with ambivalent assumptions on the impending trial. The statistics reveal a strong majority of pharmaceutical agents that pass Phase III go on to be passed by the FDA and EMA. Hence, this company's pivotal Phase III VTL-308 is strongly likely, in our view, to be successful in possibly treating a vastly growing sector without a clear gold standard treatment.

This segment has been shown to be one of the "hotter areas" in pharmaceutical investing secondary to its high need and minimal competition. In previous press releases, there was seen to be an increase in monthly participants for the trial, as well as a high power of validity in the study that was successful in Phase I and II. This represents a strong sign that Vital is looking to enhance its statistical power after a good showing in Phase II, something not commonly done if a company is concerned about its ongoing Phase III results.

This article was written by

DM Martins Research profile picture
Tracking Economic Inflection Points To Guide Your Asset Allocation Strategy

Daniel Martins is a Napa, California-based analyst and founder of independent research firm DM Martins Research. The firm's work is centered around building more efficient, easily replicable portfolios that are properly risk-balanced for growth with less downside risk.

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Daniel is the founder and portfolio manager at DM Martins Capital Management LLC. He is a former equity research professional at FBR Capital Markets and Telsey Advisory in New York City and finance analyst at macro hedge fund Bridgewater Associates, where he developed most of his investment management skills earlier in his career. Daniel is also an equity research instructor for Wall Street Prep.

He holds an MBA in Financial Instruments and Markets from New York University's Stern School of Business.

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On Seeking Alpha, DM Martins Research partners with EPB Macro Research, and has collaborated with Risk Research, Inc.

DM Martins Research also manages a small team of writers and editors who publish content on several TheStreet.com channels, including Apple Maven (thestreet.com/apple) and Wall Street Memes (thestreet.com/memestocks).

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Report authored by Sean Alyeshmerni, DO, edited by Daniel Martins.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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