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Infinity Pharmaceuticals Inc. (NASDAQ:INFI) Explodes on Outperform Rating

Infinity Pharmaceuticals Inc. (NASDAQ:INFI)

Infinity Pharmaceuticals Inc. (NASDAQ:INFI)

Shares of Infinity Pharmaceuticals Inc. (NASDAQ:INFI) more than doubled in value after the biopharmaceutical company said it will make a key presentation at the 2017 Society for Immunotherapy of Cancer (SITC) Annual Meeting. The stock was also up by 123% after analysts at Wells Fargo upgraded the stock to an ‘outperform’.

Infinity Pharmaceuticals Inc. (NASDAQ:INFI)

Wells Fargo Upgrade

Thursday’s rally brought an end to a sell-off that has plagued the stock since April. The stock of Infinity Pharmaceuticals Inc. (NASDAQ:INFI) came under pressure after rising to $3.50 a share, resulting in a drop below $1 a share. Infinity stock is now up by more than 130% for the year, after closing above $3.50.

Analysts at Wells Fargo believe the stock has some room to run on the upside as infinity Pharmaceuticals moves to make a presentation on IPI-549, an orally administered immuno-oncology development candidate.

IPI-549 has the potential to treat a broad range of solid tumors. Wells Fargo analyst Jim Birchenough believes the cancer therapy has a high likelihood of proof of concept data.

” … With likely validation of tumor macrophage targeting in immuno-oncology and a unique mechanism of action, we see upside potential not reflected at current stock price,” Birchenough said.

The analyst has since increased his share price target on the stock from $1 to $5 a share.

Infinity Pharmaceuticals Inc. (NASDAQ:INFI) is to make a presentation on a Phase 1/1b clinical study which is evaluating the safety and activity of IPI-549. The company is investigating the candidate drug as a monotherapy and in combination with Opdivo for patients struggling with advanced tumors. Reports indicate that IPI-549 could be the only P13K-gamma inhibitor in clinical development.

Wider Than Expected Net Loss

Development of IPI-549 and the Wells Fargo update has helped renew investor interest in infinity Pharmaceutical after a wider than expected second-quarter net loss triggered a sell-off. The biopharmaceutical company reported a net loss of (-$0.34) cents a share wider than consensus estimates of a net loss of (-$0.22) cents a share.

Since Infinity Pharmaceuticals Inc. (NASDAQ:INFI) does not have any approved product in the market, it likely needs to get everything right on the development of IPI-549 if it is to continue trading at higher levels. The company did not generate any revenues in the recent quarter compared to collaboration revenues of $9.5 million reported last year – mostly from royalty, license and milestone payments.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

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