Bullish Arbutus Biopharma Analyst Breaks Down Pipeline Opportunity

The expected start of combination clinical trials has H.C. Wainwright bullish on shares of Arbutus Biopharma Corp. ABUS.

The Arbutus Analyst: Ed Arce raffirmed a Buy rating on shares of Arbutus Biopharma Corp. with a $10 price target. 

The Arbutus Takeaways: On Tuesday, Arbutus announced it entered into a collaborative agreement with Vaccitech plc. VACC to begin Phase 2a clinical trials for a combination of its RNAi therapeutic AB-729 and Vaccitech’s immunotherapeutic VTP-300 for chronic hepatitis B, Arce said in a note 

This is the third combination study involving AB-729 that Arbutus has initiated in 2021, and it “could elicit synergistic responses in CHB patients,” the analyst said. 

The $10 price target is calculated using a risk-adjusted, sum-of-the-parts, net present value model that incorporates varying probabilities of success on different pipeline candidates and revenue projections through 2037, he said.

AB-729 contributes $6.01 to the price target alone, with a 55% probability of success and peak revenue estimates of $1.4 billion in 2037, according to H.C. Wainwright. 

ABUS Price Action: Shares of Arbutus Biopharma lost 0.68% in Tuesday's session, closing at $2.93.