Shares of Fennec Pharmaceuticals (NASDAQ:FENC) have been on a roller coaster ride since Monday. The stock prices plummeted 10% and eventually closed 8.3% lower as it announced the exorbitant pricing for pediatric chemo-induced hearing loss treatment, Pedmark.
However, in the early hours of Tuesday, shares gained momentum, rising almost 5% as of writing, after the company secured a $20 million investment from Petrichor Healthcare Capital Management. The announcement was made separately.
Last week, the FENC stock was buoyed when the FDA approved its ear toxicity medication, Pedmark, after two rejections. Notably, deafness is a common ototoxic side effect of chemotherapy in children with cancer but is a largely unmet medical need. Pedmark, a sodium thiosulphate formulation, is the only FDA-approved treatment for this condition.
However, being the first mover, Fennec priced the drug at $11,417.09 per vial on a wholesale basis. This was much higher than the $8,000 that Wedbush analyst David Nierengarten had expected.
Is FENC Stock a Good Buy?
However, although investors ran away from the stock, thinking that the high price might be a deterrent for the drug to capture meaningful demand, Nierengarten remained bullish. The analyst believes revenues have the potential to reach $100,000 per patient on average. Importantly, he considers Fennec to be a good acquisition candidate with its significantly low valuation. This also makes it an attractive stock for investors.
The analyst increased the price target to $19 from $11 while maintaining a Buy rating on the stock.
Wall Street is bullish on the stock, with a Strong Buy consensus rating based on three unanimous Buys. The average price target for Fennec is $14.67 now, indicating a 104.3% upside from current price levels.
