AC Immune Promising On Alzheimer's, But Light On Short-Term Catalysts, Says Credit Suisse

While AC Immune SA (NASDAQ: ACIU)’s crenezumab Alzheimer's treatment could be a breakthrough if trials prove successful, the faraway approval and launch timelines for the drug could mean the stock will see few catalysts over the next 12 months, according to Credit Suisse.

The Analyst

Alethia Young of Credit Suisse downgraded AC Immune from Outperform to Neutral and lowered the stock’s price target from $18 to $14.

The Thesis

Crenezumab remains the most important value driver for AC Immune, Young said in a Friday note. (See the analyst’s track record here.)

The drug is undergoing Phase 3 trials for Alzheimer's and could prove to be a major catalyst for AC Immune, Young said. 

The approval and launch dates for the drug will most likely come after positive results from Phase 3 studies in 2022, the analyst said. 

The longer-term outlook on crenezumab remains positive, and Young estimates peak sales of $5 billion in 2027.

“We remain positive on the crenezumab asset and believe if the pivotal studies are successful that the asset clearly has multibillion-dollar potential."

AC Immune’s other programs — including ACI-24, a prospective vaccine for Alzheimer's in people who have Down’s Syndrome, and ACI-35, an Alzheimer's immunotherapy — still remain in early phases and may not provide any material catalysts over the next 12 months, the analyst said.

Price Action

AC Immune shares were down 7.32 percent midday Friday. 

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