Maintaining Hold Rating on Landos Biopharma Amid Acquisition by AbbVie and Limited Upside Potential

Landos Biopharma (LABP – Research Report), the Healthcare sector company, was revisited by a Wall Street analyst today. Analyst Ram Selvaraju from H.C. Wainwright downgraded the rating on the stock to a Hold and gave it a $20.42 price target.

Ram Selvaraju has given his Hold rating due to a combination of factors involving the acquisition of Landos Biopharma by AbbVie. The definitive agreement for AbbVie to purchase Landos at $20.42 per share alongside a non-tradable contingent value right (CVR), which could add up to $11.14 per share based on clinical milestones, has led to a reassessment of Landos’s valuation. Selvaraju downgraded the rating from Buy to Hold with a revised price target to match the acquisition price, acknowledging that while AbbVie is a promising future developer for Landos’s pipeline, the buyout offer limits the stock’s upside potential in the near term.
Furthermore, the ongoing clinical developments, particularly the NEXUS Phase 2 trial for NX-13 in treating moderate-to-severe ulcerative colitis, remain a focus for future valuation considerations. Despite this, the inherent risks associated with clinical trials, the execution of the acquisition, and the realization of the CVR’s value were factored into the Hold rating. Selvaraju’s analysis suggests that the current offer appropriately captures the value of Landos Biopharma, with limited expectation of significant price movement until the transaction is completed or new information arises.

According to TipRanks, Selvaraju is a 5-star analyst with an average return of 11.1% and a 42.03% success rate. Selvaraju covers the Healthcare sector, focusing on stocks such as BridgeBio Pharma, Axsome Therapeutics, and Genmab.

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Landos Biopharma (LABP) Company Description:

Landos Biopharma Inc is a clinical-stage biopharmaceutical company focused on the discovery and development of oral therapeutics for patients with autoimmune diseases. The LANCE platform identifies novel therapeutic targets based on predictions of immunometabolic function and creates therapeutic candidates to engage those targets in areas of unmet medical need.