Entasis Therapeutics Called to Have Huge Upside from Analysts, But Poor IPO Performance Clouds Sentiment

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Entasis Therapeutics, Inc. (NASDAQ: ETTX) has seen its quiet period come to an end, and analysts have come out largely positive on the company. There may be other analyst calls coming ahead, but here are some of the calls tracked by 24/7 Wall St. Friday’s closing price was $7.44.

Only a small excerpt of this summary was included in Monday’s top analyst upgrades and downgrades montage.

Entasis was started as Outperform and was assigned a $19 price target at Wedbush Securities. The firm noted its next-generation drugs for next generation bugs with a pipeline of new antibiotics targeted to resistant bacterial infections.

Entasis was started as Outperform and was assigned a $18 price target at Credit Suisse. The firm noted that Entasis has two Phase III-ready assets: ETX2514 for Acinetobacter infections and zoliflodacin for gonorrhea). Credit Suisse believes that the ETX2514 is the key value driver here for the stock, and noted that Entasis has sufficient cash and resources to fund operations through 2514’s Phase III data readout in 2020. The firm is modeling a 45% probability of success to this program with a potential approximate $400 million global peak opportunity by 2033.

BMO Capital Markets started Entasis as Outperform and it assigned a $18 target price.

For a backgrounder on Entasis Therapeutics Holdings, the novel antibacterial products developer priced its initial public offering (IPO) on September 25, 2018 for 5,000,000 shares of its common stock at $15.00 per share. The gross proceeds to Entasis were approximately $75 million before backing out underwriting fees, commissions and related costs. Credit Suisse and BMO Capital Markets were the joint book-running managers for this IPO; and SunTrust Robinson Humphrey and Wedbush PacGrow were co-managers in this IPO.

Shares of Entasis continued to drop handily from its IPO price. Monday’s reaction was down 2.3% at $7.26, versus a post-IPO range of $6.55 to $13.70.