Baird's Stock Recommendations for Coronavirus Market Sell-Off:
uniQure N.V. (QURE). QURE shares have taken a hit recently, down nearly 30% for the year (as compared to around 8% for the XBI). This is primarily due to the delay in the gene therapy company’s Huntington’s disease (HD) program, which was slated to enter the clinic in late 19/early 20. As we’re knocking on the door of March, investors are predictably perturbed. However, we see HD asset, AMT-130, as essentially a free call option, assigning the majority valuation to AMT-061, QURE’s hemophilia B (hemB) program. In our most recent note, we highlight the benefits of AMT-061 over competitors in the field. Most notably, Phase 3 top-line data is expected by YE20, putting it first in line to commercialize. This timing can be critical in the gene therapy space as once a patient is dosed with a gene therapy, they likely can’t be re-dosed even with a different gene therapy. In addition to this potential commercial positioning, we believe QURE has blocking IP in the hemB gene therapy space, giving them an additional competitive edge. Overall, we think QURE has been punished enough for its sluggish HD pace and its hemB program alone makes it worth more than their current market valuation. QURE is a late-stage pharmaceutical company that faces clinical efficacy, regulatory, financing, and patent risks, all of which may affect commercialization and profit. Our QURE $80 price target is derived from our DCF analysis with a WACC of 12.9% and a 2.0% terminal growth rate.