Please ensure Javascript is enabled for purposes of website accessibility

Why Mustang Bio Stock Galloped Higher Today

By Keith Speights - May 18, 2021 at 4:03PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The biotech announced a clinical update and an analyst initiated coverage on the stock.

What happened

Shares of Mustang Bio (MBIO -0.71%) were galloping 13.3% higher as of 3:43 p.m. EDT on Tuesday. The big gain came on the heels of two developments. Mustang Bio and cancer research and treatment center City of Hope announced the first patient dosing in an early-stage clinical study evaluating MB-101 in treating leptomeningeal brain tumors. Also, investment firm BTIG initiated coverage on the stock with a buy rating and a price target of $11.

So what

As Mustang CEO Manuel Litchman said, "The successful dosing of the first patient in this clinical trial of MB-101 is an important milestone in Mustang's development program." He's right. The company doesn't have any products on the market yet. Investors applaud any significant progress with the clinical testing of its pipeline candidates.

Scientist looking at PC and another scientist looking through a microscope

Image source: Getty Images.

The bigger catalyst for the biotech stock, though, was probably BTIG's initiation of coverage. In April, three analysts surveyed by Refinitiv had buy recommendations for Mustang Bio with another analyst rating the stock as a strong buy. The average price target for those four analysts was $10.25.

BTIG's price target represents a 285% premium to Mustang's closing price on Monday. It will also boost the consensus price target for the stock.

Now what

Mustang Bio and City of Hope plan to enroll up to 30 patients in the study of MB-101. The biotech expects to soon enroll its first patient in a phase 2 study of another pipeline candidate, MB-107. It hopes to also file an Investigational New Drug (IND) application in the second quarter to advance MB-207 into a phase 2 clinical study. 

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Mustang Bio, Inc. Stock Quote
Mustang Bio, Inc.
$0.74 (-0.71%) $0.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/16/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.