The upgrade follows the company's announcement that it was finalizing plans for its gevokizumab Phase 3 program.
The program was finalized following a meeting with regulators from the FDA.
"Our call is based on valuation and optimism around positive upcoming data from the P3 trial for lead asset gevokizumab (gevo) expected sometime mid-year. On positive data, we're expecting ~15-20% of upside to the stock, with potential for additional upside in the form of two other P3 readouts for gevo expected by year-end," MLV said.
The firm maintained its $7 price target on the shares.