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BMO Sees A Low-Risk Biotech Buy In Replimune

Hannah Genig

Biotech Replimune Group, Inc. (NASDAQ: REPL), which conducts research and cancer treatment studies using oncolytic viruses, picked up a sell-side bull Tuesday.

The Analyst

BMO Capital Markets analyst Do Kim initiated coverage of Replimune Group with an Outperform rating and $31 price target.

The Thesis

Replimune has developed RP1, a treatment for large injected and uninjected tumors using oncolytic viruses. BMO considers the company to be low-risk because of the treatment’s similarity to T-Vec, the only FDA-approved virus of a similar nature, Kim said in the initiation note. (See the analyst's track record here.)

“We believe RP1 can deliver on heightened expectations for oncolytic viruses, with the advent of immunotherapy, which should expose tumors to greater systemic immune activity," the analyst said.

With a stronger potency compared to T-Vec, RP1 should achieve greater benefits than those revealed in T-Vec studies, Kim said.

The study of RP1 will additionally evaluate bladder cancer, nonmelanoma skin cancer and MSI-H cancers, Kim said. Pending clinical data, the treatment could be as effective in these tumor types, Kim said, adding that the MSI-H market opportunity could replicate that of melanoma.

Since the treatment is versatile, Replimune is able to market to a variety of patients, the analyst said.

“An important characteristic of oncolytic viruses is genetic engineering, which enables tumor selective targeting and expression of biologic therapies, including antibodies, ligands and cytokines."

Price Action

Replimune shares were down 0.18 percent at $17.07 at the time of publication Tuesday.

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Latest Ratings for REPL

Date Firm Action From To
Aug 2018 BMO Capital Initiates Coverage On Outperform
Aug 2018 JP Morgan Initiates Coverage On Overweight

View More Analyst Ratings for REPL
View the Latest Analyst Ratings

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