Sometimes the biggest stock moves happen for seemingly hard-to-understand reasons. That’s often the case with biotech stocks. Companies might rise or fall on clinical results that seem mixed at best. That’s why many traders look to specific analysts for insight, and their commentary can easily send a stock up or down based on a single recommendation. This is what happened on Wednesday when shares of Jasper Therapeutics (NASDAQ: JSPR) surged over 105% after one analyst initiated coverage on the stock.
Oppenheimer initiated coverage on the small-cap biotech stock, issuing a “buy” rating right off the gate. Jasper first went public last month through a SPAC merger, managing to raise over $100 million in extra funds to sustain itself. Since then, shares have fluctuated significantly, as most post-IPO small-cap biotech tend to do after they go public.
Analyst Jay Olsen said that he thinks the company’s lead drug candidate, JSP191 stands an excellent chance of getting approved as a cancer drug. Specifically for blood cancer patients, as well as handling the body’s response to new stem cell treatments.
“We view JSPR as well-positioned to potentially transform the decades-old standard HSCT for various diseases as a standalone conditioning agent or as the backbone of the conditioning regimen,” said Olsen.
JSP191 is a type of monoclonal antibody that can be used as a conditioning agent in patients during stem cell transplants. For most types of blood cancers, stem cell transplants are quite effective, but it’s hard to get new cells to graft without eliminating the existing strain of stem cells in the recipient.
That’s why conditioning agents have become so popular recently, although they are far from perfect. They help drain the bone marrow by targeting specific stem cell factors. Olsen said that he thinks the drug could generate peak sales of over $2.3 billion. In comparison, the company’s current market cap is just $500 million. Olsen also put a price target of $21 per share.
JSP191 is still in phase 1 trials, where six out of six initial participants had a 100% success rate in accepting stem cells from donors. This news was made all the better because these six participants were ineligible for the normal pre-transplant conditioning process.
The analyst’s comments were enough to make Jasper the best-performing stock of the day. Shares jumped over 105% as traders jumped on the news. Not all analyst recommendations carry this much weight. More than anything, it probably has to do with Jasper being a newly listed stock. Additionally, being an extremely speculative early-stage biotech also helps. Lastly, shares probably jumped because regular meme stocks haven’t been making as many waves recently. This leaves many eager volatility hunters looking for other possible catalysts, hence why Jasper jumped so much on Wednesday.
Jasper Therapeutics Company Profile
Jasper Therapeutics Inc is a clinical-stage biotechnology company dedicated to enabling cures through hematopoietic stem cell therapy. It is focused on the development and commercialization of safer and more effective conditioning agents and stem cell engineering to allow for expanded use of stem cell transplantation and ex vivo gene therapy. – Warrior Trading News