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UPDATE: Bank Of America Reiterates On Vital Therapies On Improved Outlook

Dwight Einhorn

In a report published Friday, Bank of America analyst Steve Byrne reiterated a Buy rating on Vital Therapies (NASDAQ: VTL), and raised the price target from $20.00 to $40.00.

In the report, Bank of America noted, “Following the recent update on the enrollment rate and patient characteristics in the pivotal study (VTI-208) in acute alcohol-induced hepatitis (AILD) along with discussions with liver specialists, we are raising our PO from $20 to $40. Our valuation change is driven by greater conviction in success of VTI-208 (50% risk adj. vs. prior 40%) and higher peak market penetration (30% in US & EU vs. prior US 20%, EU 10%), partly offset by assumed lower EU price ($100k/trt vs. $150k in US) and dilution in 2015 on a capital raise.

"The upside potential is significant, given the large market with no effective treatments (reportedly ~30k cases/yr in each of the US and EU with 90-day survival near 50%). The pivotal program has significant binary risk, but with an EV of $540mn, we see the risk/reward balance as favorable.”

Vital Therapies closed on Thursday at $25.79.

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