Tuesday - Analysts at Jones Trading have initiated coverage on Achieve Life Sciences (NASDAQ:ACHV), a clinical-stage biopharmaceutical company, with a Buy rating and a stock price target of $20.00.
The firm sees a significant opportunity for Achieve Life Sciences as it develops and commercializes cytisinicline, a product aimed at aiding individuals to quit tobacco, including smoking and e-cigarette use.
Cytisinicline has a history of safe use for smoking cessation in Central and Eastern Europe, yet it has not been introduced to the U.S. or broader European markets. Achieve Life Sciences is working to bring this treatment to these new markets. Jones Trading's positive outlook is partly based on the potential market void left by Pfizer (NYSE:PFE)'s withdrawal of Chantix from the U.S. market in 2021.
According to Jones Trading, the smoking cessation market has been largely dominated by generics with limited marketing efforts. They believe that Achieve's branded cytisinicline could capture market share in this segment. The company's focus on this specific healthcare need presents a strategic advantage, as there is currently no drug with e-cigarette cessation indicated on its label.
The analyst highlighted the growing trend of vaping and the potential for cytisinicline to be the first drug to address e-cigarette cessation specifically. With the increase in vaping, particularly among younger demographics, this could represent a significant growth driver for Achieve Life Sciences if cytisinicline is approved and marketed effectively.
The Buy rating and $20 stock price target reflect Jones Trading's confidence in the commercial viability of cytisinicline and the company's potential to penetrate the smoking cessation market. The target suggests a positive outlook for the stock, indicating an anticipated rise in its value based on the company's prospects.
InvestingPro Insights
As Achieve Life Sciences (NASDAQ:ACHV) garners a Buy rating from analysts at Jones Trading, with a promising price target of $20.00, InvestingPro data and tips provide additional context for investors considering this clinical-stage biopharmaceutical company. With a current market cap of $150.02 million, ACHV's financial health and future prospects are a focal point for potential investors.
InvestingPro data indicates that ACHV operates with a negative P/E ratio, at approximately -2.97, reflecting its current lack of profitability. This is further emphasized by an adjusted P/E ratio for the last twelve months as of Q4 2023 at -5.2. The company's EBITDA growth over the same period, however, was 33.38%, hinting at potential future improvements in operational efficiency.
From an analytical perspective, two InvestingPro Tips that stand out are the revisions by analysts, who have adjusted their earnings expectations upwards for the upcoming period, suggesting some optimism about the company's future performance. On the other hand, ACHV is noted for quickly burning through cash and suffering from weak gross profit margins, which could be areas of concern for investors.
For those interested in a deeper dive into ACHV's financials and future outlook, InvestingPro offers additional tips, including insights into the company's debt levels and liquidity challenges. With 6 more tips available on https://www.investing.com/pro/ACHV, investors can use the coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, providing a comprehensive toolkit for informed investment decisions.
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