In a July 21 research note, H.C. Wainwright & Co. analyst Yi Chen reported that HTG Molecular Diagnostics Inc. (HTGM:NASD) has created a new business unit, HTG Therapeutics, to identify drug candidates using the company's technology.
Chen explained that HTG Therapeutics aims to more quickly generate compounds, which potentially have superior efficacy and safety, by employing HTG Molecular's Transcriptome Panel, which measures about 20,000 messenger RNA targets, and its HTG EpiEdgeSeq system, which profiles RNA modifications.
At first, HTG Therapeutics would work on identifying candidates that target RNA or RNA modifying proteins, Chen noted. Those could have potential in oncology, immunology, diabetes, transplants and rare diseases.
To later develop any of the candidates that HTG Therapeutics identified, HTG Molecular likely would partner with another biopharma.
"We note that RNA-targeting drugs are part of future precision medicine," Chen wrote. "HTG Therapeutics could bring significant upside to the company in the coming years via licensing deals."
Regarding HTG Molecular's Transcriptome Panel, its commercial launch, planned for August 2021, is imminent. Already the biopharma has received commercial orders for the product in the U.S. and Europe from academic and biopharma entities.
Also, HTG Molecular already signed agreements with Early Adopter Program (EAP) collaborators in Europe and the U.S. Through the EAP, HTG affords a select group of customers access to the product before it officially hits the market. These early adopters in Europe include the Fundación Instituto Valenciano de Oncologia, in Spain, and Tyrolpath Obrist Brunhuber GmbH, in Austria. In U.S., they include the MD Anderson Cancer Center, Duke University Medical Center and Saint John's Cancer Institute.
These orders and agreements indicate "that market demand is strong for the panel from cancer centers and research institutions," Chen wrote. "We expect more collaborators to join [the] EAP once the panel is launched, which should make meaningful contributions to the company's top-line growth."
H.C. Wainwright has a Buy rating and $9 per share price target on HTG Molecular Diagnostics, the stock of which is now trading at about $5.48 per share.
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Disclosures from H.C. Wainwright & Co., HTG Molecular Diagnostics, Inc., July 21, 2021
Investment Banking Services include, but are not limited to, acting as a manager/co-manager in the underwriting or placement of securities, acting as financial advisor, and/or providing corporate finance or capital markets-related services to a company or one of its affiliates or subsidiaries within the past 12 months.
I, Yi Chen, Ph.D. CFA and Raghuram Selvaraju, Ph.D., certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst's household has a financial interest in the securities of HTG Molecular Diagnostics, Inc. (including, without limitation, any option, right, warrant, future, long or short position).
As of June 30, 2021 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of HTG Molecular Diagnostics, Inc. .
Neither the research analyst nor the Firm knows or has reason to know of any other material conflict of interest at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The Firm or its affiliates did not receive compensation from HTG Molecular Diagnostics, Inc. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
The Firm does not make a market in HTG Molecular Diagnostics, Inc. as of the date of this research report.
H.C. Wainwright & Co., LLC and its affiliates, officers, directors, and employees, excluding its analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research report.
