How Speculative Biotech 9 Meters Biopharma Could Rise Tenfold
9 Meters Biopharma may not be a household name right now, but one brokerage firm sees huge potential upside.
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9 Meters Biopharma Inc. (NASDAQ: NMTR) may not be a household name right now, but one brokerage firm sees huge potential upside. In fact, SunTrust Robinson Humphrey sees 9 Meters stock rising tenfold.
The firm initiated coverage of 9 Meters with a Buy rating and a $5 price target, implying an upside of roughly 800% from the most recent closing price of $0.56. Srikripa Devarakonda and Robyn Karnauskas were the analysts on the SunTrust call.
Note that 9 Meters Biopharma is a mid-clinical-stage gastrointestinal (GI) company with programs in celiac disease (CeD) and short bowel syndrome (SBS). 9 Meters was formed as a merger of three companies and has existed in its current form only since April 2020.
SunTrust highlighted a couple key points of its thesis. The firm sees 9 Meters as having “Two shots on goal” with differentiated products in CeD and SBS. The company has experienced management with more than 50 years combined experience in GI and strategy to partner the programs. It also has strong shareholder base, including OrbiMed. It posted encouraging Phase 2b data in CeD with potential for a first-in-class drug targeting a $705 million peak.
The firm detailed in its report:
We see this as a high risk, under-covered opportunity with a favorable risk/reward profile with 850%-2500% upside/50% downside from CMP. We acknowledge investors are likely to see a pivotal trial in a tough-to-crack CeD, a pre-POC SBS program, and need to raise cash, as high risk. We highlight a strong risk-reward profile, with potential upside of $4 – $13/sh from positive data; stock likely to trade at cash of ~$0.2/sh if both programs fail. At 100% PoS, we see $19/sh; every $100 million in peak sales adds $3/sh to our DCF.
Overall, SunTrust sees incredible upside in 9 Meters, and its $5 price target could prove conservative if everything goes according to plan.
9 Meters Biopharma stock traded up about 16% at $0.65 on Tuesday, in a 52-week range of $0.40 to $0.94.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
