One of the biggest winners on Tuesday was a small biotech stock that few people have likely heard about. Viela Bio (NYSE: VIE) is a clinical-stage biotech company working on a number of inflammation and autoimmune drugs. While the company has stayed out of the news for the most part, shares of Viela Bio shot up by as much as one-fifth after Wall Street analysts decided to upgrade the stock.
In particular, Morgan Stanley raised its target price on Viela Bio from $25 per share to $35 per share in a report issued to clients on Tuesday. Currently, the company has an “overweight” rating on the stock, and based on Viela’s current price, suggests a 40% upside on the stock.
Other investment houses, such as Guggenheim, have begun covering the stock as well recently with a $44 per share price target in a note released back in late October. Goldman Sachs also started covering the stock, issuing a “buy” rating and setting a $32 price tag. The last financial institution, Cowen & Co, issued an “outperform” rating as well.
Morgan Stanley’s stock upgrade on Tuesday didn’t seem to be in response to any particular news development from the company. Prior to this, the last noticeable announcement made by Biela Bio was that it was starting a phase 2b clinical trial of their drug candidate, VIB4920, which targets a rare autoimmune disease called Sjogren’s syndrome. This condition, which causes severe inflammation and destruction of the salivary glands in the body, ends up causing severe dryness and chronic pain in patients.
“Sjögren’s is a common rheumatic disease for which there are currently no approved disease-modifying therapies. Patients with this disease suffer from debilitating fatigue and extensive mouth and eye dryness, and in some cases, lung and kidney disease as well as an increased risk of lymphoma,” said Jorn Drappa, Chief Medical Officer of Viela Bio in an official statement earlier this month. “The initiation of this trial is an important milestone in our research and development efforts involving the CD40/CD40L co-stimulatory pathway.”
Before this, Viela Bio reported its Q3 2019 financial results, which were as expected for an early-clinical stage biotech stock. The company had seen significant quarterly losses but had enough cash to sustain itself for over a year, which is pretty standard in the biotech world until a company manages to get their drug candidates approved onto the general market.
Viela Bio was up 19.9% on Tuesday in response to Morgan Stanley’s upgrade. The company first went public in early October, hitting the markets at $23.4 per share. Since then, the stock has surged into the mid-30s before tumbling back down. Time will tell whether this biotech stock has what it takes to stick around.
Viela Bio Company Profile
Viela Bio Inc is a clinical-stage biotechnology company engaged in developing and commercializing transformative treatments for severe inflammation and autoimmune diseases. Its product inebilizumab, is a humanized monoclonal antibody, designed to target CD19, a molecule expressed on the surface of a broad range of immune system B cells. – Warrior Trading News
