Akcea Therapeutics Downgraded By Wells Fargo After Huge Run

It’s been a great week for Akcea Therapeutics Inc (NASDAQ: AKCA), but the easy money may have already been made with the stock, according to a Wells Fargo analyst. 

The Analyst

Wells Fargo analyst Jim Birchenough downgraded Akcea from Outperform to Market Perform and maintained a $30 price target. 

The Thesis

The Cambridge, Massachusetts-based biotech firm is now reasonably valued following a 53-percent gain from one week ago, Birchenough said in a Monday note. 

Akcea was boosted from news that it will be partner with Ionis Pharmacuticals Inc (NASDAQ: IONS) on the TTR amyloidosis drug inotersen.

“While we see longer-term value from inotersen, TTR-LRx and LICA conjugated lipid drugs, we would be on the sidelines ahead of the FDA panel review for volanesorsen on May 18 and review of adverse platelet effects,” the analyst said in the downgrade note.

“With 40-percent rights to a potential $1 billion-plus product and 50-percent rights to a potentially bigger next generation LICA-conjugated TTR therapeutic, we believe that upside potential to ou $30 target is justified, but view the opportunity as fairly valued ahead of expected approval and launch by July 6.”

Akcea stock jumped more than 50 percent on news of the Ionis partnership, while Ionis stock didn’t move substantially despite the fact that the company has rights to 60 percent of cash flows and an 85-percent equity stake in AKCA.

The FDA briefing document expected out by May 16 ahead of the upcoming panel review could potentially be a negative catalyst for Akcea stock, Birchenough said. 

Price Action

Akcea shares are up more than 60 percent in the last month.   

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