In a bullish endorsement for Arecor Therapeutics PLC (AIM:AREC), Panmure Gordon has issued a 'buy' recommendation, underpinning a significant upside potential with a target price of 539p — over four times the current share price of 132p.
Known for its innovative diabetes treatments, Arecor is expected to pick up royalties from AT220 product, its new insulin formulation, that could generate a sustainable revenue stream for the company.
The investment bank's note suggests that the future for Arecor looks particularly promising, given the imminent release of data from studies involving ultra-rapid ultra-concentrated insulin, AT278, tailored for patients with type 2 diabetes (T2D).
The insulin pump market, currently valued at approximately $5.5 billion, is growing steadily with a compound annual growth rate (CAGR) of 16%, positioning Arecor favourably within this expanding domain.
Recent developments in the industry, notably smaller pumps and automated control systems designed for the type 2 diabetes market, signal a shift towards more effective treatment modalities.
Arecor's focus on higher concentration ultra-rapid insulins is expected to play a pivotal role in addressing this segment's needs, Panmure reckons.