TiGenix Downgraded As Shares Soar Above BTIG's Price Target

TiGenix - American Depositary Shares TIG is up over 80 percent since the start of the year, sending the stock above BTIG's price target. 

The Analyst

BTIG analyst Timothy Chiang downgraded shares of TiGenix from Buy to Neutral and removed its price target, as the firm does not assign price targets to Neutral-rated stocks. 

The Thesis

Based on the Comitte for Medicinal Products for Human Use's recent positive opinion on TiGenix's lead product Alofisel, a cell-based treatment for perianal fistulas in Crohn's patients, Chiang said European Union approval is likely. (See the analyst's track record here.) 

The company's proposed acquisition by Takeda Pharmaceutical Co Ltd (ADR) TKPYY, announced Jan. 5, is contingent on EU approval for Alofisel.

With the recent run in the shares, there is less than 5 percent of additional upside to Takeda's offer price of 1.78 euros per share in cash, or about $43 per ADR, Chiang said. 

BTIG does not see any additional offers tabled, as TiGenix has already licensed the ex-U.S. rights to Takeda for Alofisel. Based on the assumption that EU approval comes through in the first half of 2018, Chiang said the product is likely to be marketed by Takeda in Europe.

Takeda is also seeking regulatory approvals in the U.S., Japan, Canada and the emerging markets, the analyst said. 

The Price Action

TiGenix shares were climbing 1.31 percent to $41.70 at last check.

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