Shares of Immunic (NASDAQ:IMUX) are up by 18% as of 1:30 p.m. EDT on Wednesday, despite the clinical-stage biopharmaceutical company not reporting any news. However, we can attribute Immunic's gains on the stock market today to a nod of approval from a Wall Street analyst.
Immunic specializes in developing treatments for chronic inflammatory and autoimmune diseases. One of the company's leading pipeline candidates is IMU-838, a potential medicine for relapsing-remitting multiple sclerosis (RRMS). Immunic reported top-line data from a phase 2 clinical trial evaluating IMU-838 as a treatment for RRMS in early August. IMU-838 achieved all its primary and secondary endpoints in the study, and these positive results are one of the main reasons why Piper Sandler analyst Yasmeen Rahimi initiated coverage on the company's stock with an overweight (buy) rating.
The analyst also gave the stock a $71 price target. Considering the fact that Immunic's shares closed at $14.42 apiece during the previous trading session -- and are still worth about $16.79 as of this writing -- Rahimi's price target represents a significant upside for the healthcare company.
It's always wise to take analyst recommendations with a grain of salt, and this one is no different. Immunic still has a long road ahead before it can hope to launch any of its products on the market, and in the meantime, a lot could go wrong. After all, the clinical trial process is rife with risk and uncertainty, and if one of the company's candidates fails to deliver positive results, its stock will plunge. In other words, while it might be worth keeping an eye on Immunic, its stock seems a bit too risky for most investors.