By: Adam Feuerstein | 01/22/14 - 10:32 AM EST
Stifel analyst Stephen Willey issued a new bullish note on NewLink Genetics (NLNK) this morning. I'm here to help interpret what it all means.
The headline on Willey's note reads: Still Quite Comfortable with Valuation Here - Increasing Target Price to $53
Translation: Newlink has exceeded my previous $31-per-share price target and my director of research told me that I have "to do something about it."
Willey: We are now modeling approximately $1B of peak IDO pathway inhibitor sales.
Translation: Wow! I found some new money under Newlink's couch cushions.
Willey: While acknowledging the lack of an indication-specific registrational development plan admittedly limits our ability to accurately assess the true market opportunity here, we're more than comfortable with the preclinical data generated to date...
Translation: I have absolutely no idea how to accurately forecast peak sales for a product with a teeny amount of clinical data but $1 billion is a nice round number and reads well on the Bloomberg terminal.
Willey: We still view success at the first IMPRESS interim analysis as a low-probability event but believe the growing enthusiasm around the IDO story should mitigate any associated downside.
Translation: All my hedge fund clients think dendritic cancer vaccines suck and Newlink's algenpantucel-L is no exception, so yeah, the phase III study will probably fail but buy the stock anyway because IDOs are the new checkpoint inhibitors!
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