What happened
Shares of Seelos Therapeutics (SEEL -18.80%) were skyrocketing 35.2% higher as of 11:01 a.m. EST on Friday. The huge gain came after BTIG initiated coverage on the stock with a buy recommendation and a one-year price target nearly 4.7 times higher than Seelos' closing price on Thursday.
So what
Investors shouldn't buy a biotech stock (or any other stock, for that matter) just because an analyst likes it. However, it's always a good idea to gain an understanding of the reasons behind the bullish view.
Image source: Getty Images.
In this case, BTIG analyst Robert Hazlett likes the prospects for Seelos' pipeline. Last week, the biotech announced that it had completed enrollment in a pivotal proof-of-concept study evaluating SLS-002 in treating acute suicidal ideation and behavior in patients with major depressive disorder.
Seelos also has two other clinical-stage candidates. It's evaluating SLS-005 in phase 2 studies for three neurodegenerative disorders: amyotrophic lateral sclerosis (ALS), rare genetic disease Sanfilippo syndrome, and oculopharyngeal muscular dystrophy.
Now what
The drugmaker should report key data from its study of SLS-002 in the second quarter of this year. Seelos also plans to advance SLS-005 into a pivotal phase 2b/3 clinical study targeting ALS in the first half of the year.
