On Monday, KeyBanc Capital Markets adjusted its outlook for Absci Corp (NASDAQ:ABSI), a biotechnology company specializing in artificial intelligence-driven drug development. The firm increased Absci's price target to $8.00 from the previous $5.00, while retaining an Overweight rating on the stock.
The adjustment comes in response to several recent developments at Absci. The company has initiated IND-enabling studies for ABS-101, an anti-TL1A antibody that has potential to lead its class and was designed using Absci's proprietary generative AI foundation model. This advancement marks a significant step in the drug's journey towards clinical trials and potential market entry.
Additionally, Absci has released preliminary financial results for the fourth quarter. These results, together with the completion of a follow-on stock offering that occurred today, have positively influenced KeyBanc's assessment. The offering is expected to bring in $75 million in proceeds, adding to the company's cash and equivalents balance, which stood at $97.7 million at the end of 2023.
The pro-forma cash balance, now totaling $160 million, is anticipated to sufficiently fund Absci's operations into the first half of 2027. KeyBanc's revised price target of $8 is grounded in a discounted cash flow (DCF) analysis. The analysis employs conservative model assumptions, suggesting a cautious yet optimistic valuation of Absci's future financial performance.
Absci's recent developments, including the progress of ABS-101 and its strengthened financial position, provide a clearer picture of the company's trajectory and potential for growth in the biotechnology sector. The Overweight rating implies that KeyBanc views Absci's stock as a better value than the average stock in the analyst's coverage universe.
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