The health care potential of genetics company 23andMe should give investors a massive return, according to Credit Suisse. Analyst Tiago Fauth initiated coverage of the stock with an outperform rating, saying in a note to clients on Monday evening that the company's database would be hard to match for pharmaceutical research. "We believe 23andMe offers investors a platform that enables novel discoveries into the causes and potential treatments of a wide variety of diseases at unprecedented statistical power," the note said. The company's partnership with a major drugmaker is already proving its potential, according to Credit Suisse. "In collaboration with its exclusive strategic partner GlaxoSmithKline , the company has identified over 40 novel drug targets and 19 validated targets, including its lead CD96 program in immuno-oncology. ... Looking beyond the GSK partnership, we see substantial optionality for ME's Therapeutics segment over the long run," the note said. The company went public in June through a merger with a special purpose acquisition company backed by billionaire Richard Branson. However, after rising to above $13 per share on its official first day , the stock has fallen sharply. It traded at $7.29 per share on Monday. Credit Suisse set a price target of $13 per share, implying upside of 78%. -CNBC's Michael Bloom contributed to this report.
Anne Wojcicki, 23andMe co-founder & CEO (right) celebrates with 23andMe employees after remotely ringing the NASDAQ opening bell at the headquarters of DNA tech company 23andMe in Sunnyvale, California, U.S., June 17, 2021.
Peter DaSilva | Reuters
The health care potential of genetics company 23andMe