Why Wall Street Is Excited About Histogenics Corp. (NASDAQ: HSGX)


Histogenics Corp (NASDAQ: HSGX)’s stock has been upgraded to a BUY rating from NEUTRAL by analysts at BTIG. That move signals growing confidence in the prospects of Histogenics’ lead product candidate called NeoCart.

Histogenics Corp. (NASDAQ: HSGX) is in the process of recruiting patients for a Phase 3 study of NeoCart. As at the end of 2Q2016, the company had enrolled 167 patients and its target is to enroll 245 patients into the trial.

Though the company is still far from meeting its full enrollment target, the management sounded optimistic on the patient recruitment program by raising the target of the number of patients to be enrolled by the end of this year. The year-end enrollment into NeoCart Phase 3 study was raised to a range of 190 to 200. The previous year-end target was provided in the range of 180 to 200. With that, you can see that Histogenics is looking at a higher low-end enrollment target than it earlier predicted and that says something about the confidence the management has on the program.

Histogenics wants to have recruited 245 patients by the end of 2Q2017.

Besides upgrading rating on the stock of Histogenics, the analysts also issued $3.50 price estimate on the stock. But recent gains have seen shares of Histogenics exceed BTIG’s price target.

Hope anchored on NeoCart

The reason analysts at BTIG decided to upgrade their rating on the stock of Histogenics Corp. (NASDAQ: HSGX) is that they believe the prospects for NeoCart have improved. Solid enrollment rates into the candidate’s Phase 3 study and efforts by the management to ink strategic partnerships in Japan and other regions of Asia make the analysts positive on the prospects of the drug.

How did Histogenics Corp. (NASDAQ: HSGX) fare in 2Q?

Histogenics Corp. (NASDAQ: HSGX) posted EPS loss of $0.61 in 2Q2016, which deteriorated from EPS loss of $0.58 in the same quarter last year. The EPS figure also missed the consensus estimate the called for EPS loss of $0.60. But analysts believe that the weakening financial performance will only be a temporary problem.


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