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Morgan Stanley initiated coverage of Absci (NASDAQ:ABSI) with an overweight rating, noting it sees the stock as “an economical way of gaining exposure to the theme of AI in biotech/drug development.”
The investment bank said it sees the stock’s risk-reward skewing to the upside ahead of catalysts and updates that should provide greater clarity into the company’s pipeline efforts.
Morgan Stanley said the company’s lead drug candidate, ABS-101, addresses a target, TL1A, that has been validated by third-party data sets for ulcerative colitis and Crohn’s disease. It noted that the TL1A space has also generated significant biopharma partnership interest.
The bank added that recent partnerships with AstraZeneca (AZN) in oncology and Almirall (OTCPK:LBTSF) in dermatology “help validate Absci’s approach.”
Morgan Stanley set its price target for the stock at $7.