Freedom Broker initiates on biotech Anixa with 'buy' at TP implying 177% upside

The fair value of micro-cap biotech Anixa Biosciences, which is developing, among other projects, a cancer vaccine, is almost three times higher than the current share price, Freedom Broker estimates. The firm has initiated coverage of the stock with a "buy" recommendation. Analysts note that Anixa’s early-stage developments have shown encouraging results and that the company has sufficient cash to finance its programs without diluting shareholders in the near term. The broader biotech sector is also showing signs of sustainable growth.

Freedom Broker has initiated coverage of Anixa Biosciences with a "buy" recommendation, according to a note seen by Oninvest. The target price is set at $9 per share, implying 177% upside from the last close. Yesterday, October 6, Anixa ended trading at $3.25 per share. In early trading today, it slipped 0.7%.

The valuation is based on a 10-year discounted cash flow model, adjusted for the expected probability of regulatory approval of the company’s products. Freedom Broker projects that could occur between 2030 and 2031.

Anixa Biosciences specializes in the treatment and prevention of cancer. Two of its programs are currently in phase I clinical trials, the earliest stage of testing. One is an ovarian cancer therapy based on CAR-T technology, a personalized treatment that reprograms a patient’s own immune system to attack tumors. The other is a vaccine for breast cancer. Both programs have demonstrated supporting safety and activity data, according to Freedom Broker. Three additional projects are in preclinical development.

Freedom Broker highlights Anixa’s flexible monetization strategy and partnership-based business model. The company develops its portfolio jointly with leading institutions such as Cleveland Clinic, the U.S. Department of Defense, and Moffitt Cancer Center.

Thanks to government grants and institutional collaborations, Anixa maintains low cash burn and sufficient liquidity, reducing the likelihood of near-term shareholder dilution, Freedom Broker notes.

Both of Anixa’s lead programs remain in early-stage clinical testing, and additional data is required to confirm their potential, Freedom Broker warns. Moreover, the company is pursuing a first-in-class therapy, which entails the risk of unpredictable regulatory responses, additional data requests, and trial delays.

Freedom Broker also points out that Anixa intends to monetize its assets primarily through partnerships, which introduces uncertainty regarding the timing and economics of such agreements. This could, in turn, affect the company’s long-term earnings potential.

Year to date, Anixa shares have gained 40%. All four Wall Street analysts covering the company currently recommend buying its stock, according to MarketWatch, with a consensus target price of $9 per share.

The broader U.S. biotech sector is also in positive territory this year. The SPDR S&P Biotech ETF, which tracks a wide range of biotech names, has risen about 16% since the start of the year, outperforming the S&P 500. Analysts believe the sector is emerging from a five-year downturn as structural problems ease and lower interest rates bring risk-tolerant investors back to the market, Barron’s reports.

Another reason for optimism, writes Barron’s, is that major pharmaceutical companies are facing looming patent expirations for key drugs, which could trigger a new wave of mergers and acquisitions in the industry.

The AI translation of this story was reviewed by a human editor.