WASHINGTON (AP) -- Shares of Regado Biosciences jumped more than 40 percent in trading Monday after analysts initiated coverage of the small biotech drugmaker based on the promise of its experimental anticlotting drug.
THE SPARK: Analysts from Canaccord and BMO recommended buying shares, predicting the company's REG1 drug compound could provide significant advantages over older drugs used to prevent blood clotting during surgery. Regado is studying the drug for use in patients undergoing surgical procedures to improve blood flow to the heart and clear dangerous plaque from the arteries. These patients face risks of bleeding and clotting complications when treated with current drugs, which can be difficult to control.
THE ANALYSIS: Canaccord analyst Ritu Baral said in a note: "We see REG1 as a highly innovative new anticoagulant that could improve outcomes across a large number of 'cardiovascular' procedures." Baral has a "Buy" rating on the stock, with a $14 price target. She predicts the drug could eventually garner $2.5 billion in worldwide sales.
BMO analyst Jim Birchenough also initiated coverage of the stock with an "Outperform" rating. He noted that REG1 has shown statistically significant improvements in bleeding and stroke side effects compared to heparin, an older generic drug used in surgery. The analyst set a $12 price target.
SHARE ACTION: Shares of Regado Biosciences Inc. rose $1.98, or 43.3 percent, to $6.49 in midday trading. Earlier shares peaked at $6.74. The Basking Ridge, N.J., company went public last month at $4 per share. Canaccord and BMO were among the IPO's underwriters.
- Health Care Industry