Shares of Humanigen Inc (NASDAQ:HGEN) slumped 53% to $7.13 in the morning session after Disappointing EUA Outcome.
H.C. Wainwright’s Joseph Pantginis states, “We reiterate our Buy rating though are reducing our price target to $28 from $36 based on the following factors: (1) adjustment to base year; (2) adjustement to fully diluted share count; and (3) pushing out our lenzilumab COVID-19 approval timelines in the U.S. and ex-U.S. to 2023 and 2024, respectively.
Our valuation is based on our clinical net present value (NPV) model, which allows us to flex multiple assumptions affecting a drug’s potential commercial profile. Our valuation is currently based on the two lead opportunities for lenzilumab: (1) COVID-19 (72% contribution); and (2) CAR-T therapy (28% contribution). Moving forward, we believe upside potential to our valuation exists based on:
(1) attaining higher market penetration than currently projected; (2) adding additional indications to our valuation based on development stage and clinical data; and (3) augmenting projected chances of success based on clinical progress. Factors that could impede reaching our price target include failed or inconclusive clinical trials, the inability of the company to secure adequate funding to progress its drugs through the development pathway, the occurrence of dilutive capital raises, and lack of commercial success.”