BMO Smells Opportunity In OptiNose

Wall Street firms have given rave reviews for OptiNose Inc OPTN, which IPO-ed recently.

BMO Capital Markets was no exception, assigning its top rating to shares of the company.

The Analyst

BMO issued its initiation note on OptiNose on Tuesday, with Gary Nachman being the lead analyst.

The Rating

BMO initiated OptiNose with an Outperform and $29 price target. 

The Thesis

OptiNose's exhalation delivery system, or EDS, which is focused on high and deep intranasal deposition of a drug, offers significant improvement over current nasal sprays and aerosols, Nachman said. (See Nachman's track record here.)

The company's lead product Xhance was recently approved for nasal polyps, with a launch planned for the second quarter of 2018, the analyst said. 

Positive feedback from physicians supports the significant opportunity for Xhance, Nachman said. Expanding Xhance to broader chronic sinusitis, or CS, would expand the opportunity further, the analyst said. BMO estimates peak sales of about $700 million for Xhance.

BMO also sees opportunities outside of the ENT/allergy sector, including the potential for "nose-to-brain" delivery of drugs treating certain CNS conditions. This, coupled with the company being a potential M&A target, represents upside to the stock, Nachman said. 

Price Action

OptiNose shares were sliding 6.70 percent to $19.37. Having recorded a listing gain of 19 percent on its Oct. 13 debut,  the stock has been trending broadly higher since then.

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Photo Courtesy Of OptiNose.