In a June 18 research note, analyst Tony Butler reported that ROTH Capital Partners initiated coverage on Translate Bio (TBIO:NASDAQ), in advance of an anticipated Q3/19 data readout, with a Buy rating and a $25 per share target price. The company's current share price is about $13.16.
Translate Bio is a Massachusetts-based company that is developing mRNA therapies for cystic fibrosis and ornithine transcarbamylase deficiency.
Butler listed the key attributes of Translate Bio that justify ROTH's Buy rating on it. They are as follows.
1. The company has a solid platform based on a modular manufacturing process for its mRNA and lipid-based nanoparticle delivery vehicle. With it, Translate Bio can make new mRNA therapies and, therefore, easily venture into new indications.
2. The company's lead clinical program, MRT5005 for cystic fibrosis, is in the multiple ascending dose phase of the ongoing Phase 1/2 study. Translate Bio is expected to report interim data from the trial in Q3/19.
3. The company has a beneficial agreement with Sanofi to develop up to five vaccines. The partnership should diversify Translate Bio's pipeline and provide it with revenue. Sanofi already paid a $45 million upfront payment to the company and will pay up to $805 million plus tiered royalties.
4. The company is well funded through year-end 2020, well past the data readout, thanks to its recent raise of $47 million.
Butler explained that ROTH's $25 target price is based on these assumptions: a 45% probability that MRT5005 is successful in adults and a 35% chance of success in 12 to 17 year olds, a 70–85% penetration rate during the fourth or fifth year of commercialization and about $1 billion in risk-adjusted revenues in 2028.
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Disclosures from ROTH Capital Partners, Translate Bio, Inc., Company Note, June 18, 2019
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
ROTH makes a market in shares of Translate Bio, Inc. and as such, buys and sells from customers on a principal basis.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.
