As I mentioned, the stock has also been named as a potential takeout target. In the past few years, biotech deals have been done in a range of 7x sales to as much as 15x sales. If ITMN is indeed acquired, perhaps by a rival looking to “bolt on” IPF treatments to its existing portfolio, that type of multiple is not farfetched for a company that has been growing its top line by several hundred percentage points.
Taking the midpoint of that range, 11x 2015 sales, and the stock could be worth $49 in a year, for a 45% upside from current prices.
Please be aware that I am giving the stock an Aggressive risk rating, as clinical data can make or break a biotech, and the company has a critical May up ahead. But with solid data already behind it, I like the stock’s potential to continue climbing.