Jefferies says buy this pharmaceutical play, sees more than 100% upside from here

Aclaris Therapeutics’ recent drug developments could spell more gains ahead, according to Jefferies. Analyst Roger Song upgraded the stock to buy from hold and hiked his price target by $5 to $7, implying about 123% upside from Monday’s close. The stock has already soared this year, seeing gains of around 199%. ACRS YTD mountain ACRS, year-to-date Song specifically pointed to the strength of its BSI-045B treatment, which is an anti-thymic stromal lymphopoietin (TSLP) monoclonal antibody for atopic dermatitis (AD). With Phase 2b studies on the drug expected to begin in the first quarter of next year as well as more guidance in the weeks ahead, the analyst thinks there could be even more gains ahead. “BSI-045B is the 1st anti-TSLP showing clinical [proof of concept] in AD, which is likely supported by [a] differentiated binding profile,” he told clients. “Data supports further development in [a] [placebo-controlled] study for [additional] validation in AD [and] beyond. If success, BSI-045B could be the 1st anti-TSLP in the crowded AD space providing differentiated [mechanism of action] [with] improved efficacy [and] safety.” Song noted that data from the drug’s Phase 2a studies looked “very compelling.” He said the results showed proof that BSI-045B could be a blockbuster drug if it continues to perform positively in future trials, especially given that other anti-TSLP drugs are being developed for asthma and chronic obstructive pulmonary disease. This comes as the company announced on Monday that it entered into an exclusive license agreement with Biosion for worldwide rights, excluding greater China, to both that drug and its other anti-TSLP drug known as BSI-502. Jefferies isn’t the only firm that’s bullish on Aclaris. Seeing the deal as “transformative,” Piper Sandler analyst Christopher Raymond upgraded its rating to overweight from neutral and upped its target by $10 to $13. That reflects around 314% upside ahead, as of Monday’s close. “While atopic derm (the primary indication for at least one if not both assets) is an increasingly crowded field, we think the mechanisms and data generated to date are intriguing enough to indicate that ACRS has found some truly differentiated assets, allowing for the potential to carve out meaningful patient share in this large and growing segment,” he said. “Coupling this with a full schedule of meaningful catalysts well into next year, we think ACRS shares have meaningful room to run here, and are thus now buyers.” Following the moves, shares of Aclaris soared more than 13% in the premarket. The stock has also gained almost 164% in the past one month. To be sure, the stock closed Monday at $3.14, meaning it could be subject to sharp moves in either direction given its low price. Its market cap of $224 million, per FactSet, is also relatively smaller than other biotech companies.