Analyst Doubles Bet on Nasdaq’s Most Popular Stock

Let’s face it: Despite its catchy stock ticker — “LIFE” — you’ve probably never heard of aTyr Pharma (LIFE). Or at least, you probably hadn’t heard of aTyr Pharma before Monday, September 13, 2021. But if you know someone who owns the shares, you might not hear anything other than aTyr Pharma for a while.

That’s because aTyr Pharma — which until this week was a $90 million biotech startup with only $2.2 million in revenues (and $29.1 million in losses) to its name — exploded to the top of the chart on Monday. the stock charts, up 67%, making it the best-performing stock on the Nasdaq.

What’s with all the commotion? In a note from yesterday, Jones Trading analyst Prakhar Agrawal broke it out for us, explaining that aTyr shares exploded higher as the company “announced positive topline results” from a phase 1B/2A trial of its ATYR1923 therapy to treat patients suffering from pulmonary sarcoidosis (PS ), a form of interstitial lung disease.

aTyr said clinical trial results showed that ATYR1923 was “safe and well tolerated at all doses with no drug-related serious side effects or signal of immunogenicity,” and that the drug “showed important efficacy endpoints and improvements.” [on] measures of steroid reduction, lung function, sarcoidosis symptom measures and inflammatory biomarkers.”

Commenting on the news, Agrawal first warns that “this trial was a proof-of-concept” and may not have “statistical significance” at this point. Nevertheless, the analyst noted that the use of ATYR1923 resulted in improved lung function despite “tapering” of the administered steroids, and generated “clinically meaningful improvement … in all other symptom endpoints (cough, fatigue, shortness of breath)” – all “without drug related [adverse events or] immunogenicity” (ie undesired immune response).

“Net-Net,” says the analyst, “aTyr’s data is very strong… exceeding expectations and security looks clean.” And in the analyst’s view, this will allow aTyr to move forward “next year” with a more statistically significant trial, involving “~200 patients” and with the trial “possibly lasting 9-12 months.”

Accordingly, Agrawal is doubling his “buy” rating on aTyr stock and raising his price target for the stock by a third, to $20 – meaning the stock could still double from here, even after the recent run-up.

He expects the share to be there in at least a year. As for aTyr’s long-term future, Agrawal expects the company to begin generating revenue in 2025 but continue to report losses through 2026. It will not be until 2027, when revenues cross the $100 million mark, that he sees aTyr making meaningful GAAP generate profits (approximately $0.21 per share).

However, if that seems like a long time to come, consider this: After Agrawal turned profitable in 2027, Agrawal predicts that aTyr will ramp up profits quickly, growing it about 20x in three years, eventually earning close to $4 a share at $360 million in revenue by 2030.

Overall, there are 5 recent analyst reviews on LIFE, and they are unanimously positive, giving the stock its Strong Buy consensus rating. The stock is priced at $9, with an average price target of $19.67 suggesting an increase of about 119% for the next 12 months. (See LIFE stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are those of the featured analyst only. The content is for informational purposes only. It is very important to do your own analysis before making any investment.