Allakos shares surged by 16% in Wednesday afternoon trading following JMP’s initiation of coverage on the stock. JMP gave the company a market outperform rating, emphasizing the “novel biology” of Allakos and highlighting its lead drug, lirentelimab, which targets chronic spontaneous urticaria (CSU) and atopic dermatitis (AD) – both of which have high unmet needs. The investment bank predicted that upcoming Phase 2 results could drive up the stock price, estimating a 30% probability of success for CSU and 20% for AD. JMP also projected a peak penetration opportunity of approximately $1 billion for CSU and $1.9 billion for AD, and set a price target of $11 for Allakos.
The market outperform rating and positive outlook from JMP has caused a significant boost in Allakos shares. JMP’s recognition of the unique biology behind Allakos and the potential of lirentelimab to address unmet medical needs in CSU and AD has garnered investor attention. With the upcoming Phase 2 readouts, investors are hopeful for positive results, which could further increase the stock’s value. JMP’s price target of $11 reflects their optimistic outlook for the potential success and market penetration of Allakos’ lead drug.
Overall, JMP’s initiation of coverage on Allakos and their market outperform rating have generated positive momentum for the stock. This recognition of Allakos’ novel biology, coupled with the potential of lirentelimab in addressing unmet needs in CSU and AD, has sparked investor optimism. The projected peak penetration opportunity and price target set by JMP further reinforce the positive sentiment surrounding Allakos and its potential for growth and profitability.