- After reaching a post-IPO low on Friday, DICE Therapeutics (DICE +2.3%) is trading higher in morning hours as Wall Street issued bullish ratings on the company at the expiry of its IPO quiet period.
- The development stage biopharma company surged sharply in its trading debut in mid-September. However, the stock has dropped more than a quarter of its value since then.
- Issuing a buy rating, the Bank of America analyst Jason Gerberry highlights the therapeutic focus of the company in finding small molecules for disease-causing protein-protein interaction (PPI) targets that were historically addressed by injectable drugs.
- With its lead candidate S011806, DICE (NASDAQ:DICE) could compete in immunology and inflammation market which is worth about $30B globally, the analyst argues.
- S011806 is an oral small molecule IL-17 inhibitor, and the market for IL17 biologics is expanding and could have over $6B in annual sales, the analyst points out. The price target of $41 per share implies a premium of ~54.8% to the last close.
- Gerberry also cites solid pre-clinical data posted by the company for IL-17 inhibitor, similar to preclinical activity shown by the rival product COSENTYX from Novartis (NYSE:NVS).
- In addition, the near-term catalyst “2022E Ph1c data in psoriasis pts offers de-risking potential,” the analyst added, underscoring the company’s “relatively low translational risk pursuing validated targets.”
- In addition to BofA, SVB Leerink and Evercore ISI have also begun the coverage on DICE (DICE), issuing Outperform ratings on the stock with the latter estimating the highest per share target of $60.
- The trio acted as underwriters of the IPO, where the common stock of the company was priced at $17 per share.