UPDATE: JMP Securities Reiterates on Acceleron Pharma on Elevated Confidence

In a report published Thursday, JMP Securities analyst Michael G. King reiterated a Market Outperform rating on Acceleron Pharma (NASDAQ: XLRN), and raised the price target from $32.00 to $36.00.

In the report, JMP Securities noted, “We reiterate our Market Outperform rating on Acceleron Pharma and increase our price target from $32 to $36, based on elevated confidence in the sotatercept/ACE-536 program following positive Phase II data in β-thalassemia presented at ASH 2013. Recall, updated sotatercept results show meaningful increases in hemoglobin (Hgb) levels in the latest dosing cohort of 0.5mg/kg. Specifically, a third of non-transfusion dependent patients saw ≥2g/dL gains in Hgb, exceeding our expectation of a 1.5g/dL increase as a measure of clinical benefit. We anticipate further Hgb gains as the trial escalates in dose and continued safety given the favorable tolerability profile shown to date. We believe these data further de-risk sotatercept/ACE-536 development and, therefore, are lowering our discount factor for the program from 30% to 25%, incrementally lowering our blended discount rate from 32.9% to 30.7%. Revenue assumptions in our model remain unchanged. Our new $36 price target is derived through a synthesis of DCF ($31.20), comparable ($44.61) and CAGR model valuation methodologies ($35.17).”

Acceleron Pharma closed on Wednesday at $28.07.