In a note released Tuesday morning, H.C. Wainwright analyst Andrew Fein initiated a Buy on both Epizyme (NASDAQ: EPZM) and Transition Therapeutics (NASDAQ: TTHI) and set respective price targets of $40 and $10.
Amid the transition of big pharma from genetics to epigenetics, Fein likes Epizyme's platform pipeline, technology expertise and market position in the histone methyltransferase space.
Fein noted that the company has around $240 million in cash-on-hand, which he expects will fund Epizyme's operations through 2016.
"We believe that EPZM shares will perform well in next six months as preclinical and mechanistic updates first grab and then focus investor attention in anticipation of value-driving clinical data from EPZ-5676 and EPZ-6438," wrote Fein.
Fein pointed to Transition's two molecules - ELND005 and TT401 - currently in clinical evaluation as drivers of potential upside in the stock.
Fein explained that ELND005 is used in the treatment of Alzheimer's and Down Syndrome and is currently in a 400 patient, Phase two study with data expect in mid 2015.
He also noted that TT401 is a GLP1 agonist for Type two diabetes, which began a phase two study in May.
Epizyme shares are down ~1.5 percent to ~30.27, despite the H.C. initiation. Similarly, shares of Transition have slipped slightly to ~$6.57 a dip of about 0.15 percent.
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