On Wednesday morning, clinical-stage biopharmaceutical company Altimmune (ALT 14.19%) announced a regulatory update regarding one of its pipeline candidates. The news prompted bullish commentary from a Wall Street analyst. These developments sent Altimmune's shares higher. As of the close of Wednesday's trading's session, the company's stock was up by 13.9%
Altimmune announced that the U.S. Food and Drug Administration (FDA) has cleared its Investigational New Drug (IND) Application for a phase 1 clinical trial for AdCOVID. An IND application, once approved, allows a company to start human clinical trials for an experimental drug or vaccine. AdCOVID is a single-dose, intranasal, needle-free COVID-19 vaccine candidate Altimmune is developing.
The company expects to kick off a phase 1 clinical trial for this product in the coming week. This study will evaluate the safety, tolerability, and immunogenicity (the ability to trigger an immune response in the body) of AdCOVID in about 180 healthy adult participants.
Following this news, Piper Sandler analyst Yasmeen Rahimi maintained an overweight (buy) rating on Altimmune's stock with a price target of $80. The analyst's price target represents an upside of more than 200% on Altimmune's stock. Rahimi thinks that the company has several upcoming catalysts, including interim data from its phase 1 clinical trial for AdCOVID, full top-line data from this trial, and results from a clinical trial for ALT-801, a potential treatment for nonalcoholic steatohepatitis.
Altimmune could certainly ride the wave of these catalysts, provided the results from its clinical trials are to investors' liking. But for long-term investors, too many risks remain with this company. The competition is fierce within the COVID-19 vaccine market, and none of the company's current candidates are close to being commercialized. It is certainly worth monitoring the progress of Altimmune's coronavirus vaccine program, but for now, I'd advise risk-averse investors to stay a safe distance away from this healthcare stock.
This article represents the opinion of the writer(s), who may disagree with the "official" recommendation position of a Motley Fool premium advisory service. We're motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.