Janney: Time To Buy Acceleron

On Monday, Janney issued a company note on Acceleron Pharma Inc (NASDAQ: XLRN) after the company announced positive Phase III trial results of their drug that treats metastatic renal cell carcinoma (mRCC). Analysts at Janney upgraded Acceleron from Neutral to Buy, while lowering their price target from $45 to $39.

Roy Buchanan, an analyst at Janney, wrote, "Acceleron ended 2015 with $136 million in cash."

"We're upgrading to Buy from Neutral with about 60 percent upside to our current fair value, which doesn't include Celgene-funded sotatercept or the muscle programs, and could be conservative in our MDS assumptions [...] We also look forward to the dalantercept data in mRCC by YE; we have a 30 percent probability of success (through phase 3) for dalantercept in mRCC."

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Justification Of Acceleron Strength

Janney gave two reasons why they see strength in Acceleron Pharma:

1. Celgene Partnership
Analysts at Janney noted that Celgene Corporation (NASDAQ: CELG)'s partnership with Acceleron will provide funding and allow the company to develop several drug candidates in the coming years, which have the potential to drive top line growth and profitability.

2. Recent Phase II Data
Reports have indicated that Acceleron's luspatercept trial showed strong safety and efficacy rates in Phase II trials and will likely be proceeding to Phase III trials. This drug, if approved, can bring significant market share to Acceleron and be a strong component of their drug portfolio.

At The Time Of This Writing...