Key Points
He was encouraged by the progress of the company's SL-325.
This, the biotech's lead drug candidate, is about to enter Phase 2 clinical testing.
A new analyst note was the key factor behind the mini-rally in Shattuck Labs (NASDAQ: STTK) stock on the last trading day of the week. The clinical-stage biotech's shares closed the day almost 5% higher, thanks mainly to that research.
Upside potential
Early Friday morning, Brian Cheng of JPMorgan Chase's J.P. Morgan published his inaugural take on Shattuck. He rated the stock an overweight (read: buy) at a price target of $10 per share. That's nearly 35% higher than the biotech's most recent closing level.
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According to reports, Cheng's bullish evaluation focuses on Shattuck's lead drug candidate, SL-325, a first-in-class antagonist antibody presently being developed to treat inflammatory bowel disease (IBD).
In the analyst's view, the healthy volunteer data the company reported from a recent clinical trial suggested the drug had a cleaner safety profile and stronger target engagement than similar medications. Given that, it has significant potential if Shattuck can successfully develop it and earn regulatory approval.
Continued momentum
A promising drug candidate from the beginning, SL-325 continues to gather momentum. While Shattuck still has some distance to go in the often-grueling development process -- the drug is slated to enter a Phase 2 trial in the third quarter -- the lights so far seem to be green.
This makes the stock one to watch and, for those with some tolerance for risk in the often hit-or-miss biotech sector, one to consider buying.
JPMorgan Chase is an advertising partner of Motley Fool Money. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.