An analyst's initiation of coverage was the spark that lit the fire underneath Scholar Rock's (SRRK 5.95%) equity on Thursday. The clinical-stage biotech's share price ballooned by 6% in response, on a trading day when the benchmark S&P 500 (^GSPC -0.28%) sagged by 0.3%.
A rock of a stock
Well before market open, Tazeen Ahmad of Bank of America Securities launched her tracking of Scholar Rock.
Image source: Getty Images.
The reason the market reacted so strongly and positively to this is because Ahmad flagged it as a buy, at a price target of $53 per share. That's nearly 30% higher than the company's most recent closing price, even after Thursday's pop.
The analyst is particularly taken by Scholar Rock's investigational spinal muscular atrophy (SMA) drug apitegromab, according to reports. So far in its development, the medication appears to be significantly more efficacious than current treatments on the market.
The leading pipeline drug
Scholar Rock's strategy is to focus on developing drugs for relatively uncommon afflictions, such as SMA, that don't yet have effective and approved therapies.
Apitegromab is the company's most advanced pipeline drug. It has been submitted under a biologics license application (BLA) for U.S. Food and Drug Administration (FDA) approval. However, last month the regulator issued a complete response letter (CRL; or notification that an application isn't approved in its current form). Scholar Rock is working to rectify the issues detailed in the CRL.
