Needham & Company Upgrades Achaogen (AKAO) to Buy

Needham & Company upgraded Achaogen (NASDAQ: AKAO) from Hold to Buy with a price target of $19.00.

Analyst Alan Carr commented, "Achaogen announced surprisingly positive results from both Phase 3 trials of plazomicin in CRE infections (CARE trial) and complicated Urinary Tract Infections (EPIC trial). Given small size of scaled-back CARE trial, we had assumed there was no realistic opportunity for plazomicin to demonstrate differentiation from colistin. However, the trial showed plazomicin was statistically superior to colistin w/ respect to mortality and nearly so w/ respect to composite endpoint of mortality and disease-related complications. Similarly, we had anticipated EPIC trial would establish non-inferiority of plazomicin to meropenem, a potent drug used for more challenging cUTI infections. Achaogen disclosed however, that plazomicin was superior to meropenem w/ 3 of 4 key assessments."

"In our view, the combined outcome is sufficiently robust to commercially differentiate the drug in treatment of CRE. We continue to believe CRE commercial opportunity in U.S. is modest but expect Achaogen to ultimately capture $250M w/ a small 50-60 rep sales force. We are upgrading to BUY w/ $19 target based on 25x multiple applied to our 2022 EPS estimate, discounted 15% annually."

For an analyst ratings summary and ratings history on Achaogen click here. For more ratings news on Achaogen click here.

Shares of Achaogen closed at $5.25 yesterday.

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