On Monday, H.C. Wainwright adjusted its stance on Landos Biopharma (NASDAQ:LABP), shifting from a "Buy" to a "Neutral" rating. The firm also revised the price target for Landos Biopharma to $20.42 from the previous target of $50 per share.
The change follows the recent announcement last week that AbbVie (NYSE:ABBV) will acquire the biopharmaceutical company. The deal terms stipulate that AbbVie will purchase Landos at $20.42 per share in cash, totaling approximately $137.5 million, along with an additional contingent value right (CVR) per share, potentially worth up to $11.14, or roughly $75 million more, dependent on reaching a clinical milestone.
The acquisition of Landos Biopharma by AbbVie is expected to close in the second quarter of 2024. The CVR included in this transaction is non-tradable, which influenced H.C. Wainwright's decision to downgrade the rating. The firm also cut the stock price target, so the adjustment reflects the agreed acquisition price rather than the company's earlier valuation.
The analyst from H.C. Wainwright noted that AbbVie's acquisition of Landos Biopharma presents an interesting development for the latter's pipeline. Landos' leading drug candidate, NX-13, is highlighted as a promising therapeutic. NX-13 is described as a first-in-class, oral NLRX1 agonist with a dual mechanism of action that offers anti-inflammatory benefits and aids in epithelial repair.
The acquisition is seen as a strategic move for AbbVie, allowing the pharmaceutical giant to bolster its portfolio with Landos' innovative treatments. NX-13, in particular, is poised to benefit from AbbVie's resources and experience in drug development. The transaction is set to expand AbbVie's presence in the biopharmaceutical sector, specifically in the area of inflammatory diseases.
In summary, H.C. Wainwright's downgrade of Landos Biopharma to "Neutral" aligns with the upcoming acquisition by AbbVie. The firm's revised price target corresponds with the acquisition price, setting investor expectations as the deal moves toward completion in the coming quarter.
InvestingPro Insights
As Landos Biopharma (NASDAQ:LABP) prepares for its acquisition by AbbVie, current metrics and insights from InvestingPro provide a deeper understanding of the company's financial health and market performance. With a market capitalization of approximately $66.95 million and a negative P/E ratio reflecting the company's lack of profitability in the last twelve months, investors are observing a company in transition. Despite this, Landos Biopharma has exhibited a notable price performance, with a staggering 620.81% return over the last year, which aligns closely with the acquisition price set by AbbVie.
InvestingPro Tips for Landos Biopharma reveal that the company holds more cash than debt on its balance sheet, suggesting a degree of financial stability. Additionally, the stock's recent performance has led the Relative Strength Index (RSI) to suggest it is in overbought territory, which may indicate a pullback in the near term. For those interested in further insights, InvestingPro offers additional tips on Landos Biopharma, which can be explored in detail through their service. Investors can use the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing access to a wealth of expert analysis and data to inform investment decisions.
The acquisition by AbbVie is a pivotal moment for Landos Biopharma, and these InvestingPro Insights offer a snapshot of the company's current standing in the market. With the deal expected to close in the second quarter of 2024, these metrics and tips provide valuable context for investors monitoring the progress of this transaction.
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