This little-known biotech stock developing treatments for blood disorders could jump 80%, BMO says

Published Thu, Mar 23 20237:21 AM EDT

Investors should take a closer look at Disc Medicine as it develops treatments for blood disorders, according to BMO Capital Markets. Analyst Evan David Seigerman initiated coverage of Disc Medicine with an outperform rating and a $40 price target, saying that the firm's development of bitopertin to treat erythropoietic porphyrias and other blood disorders appears promising. Erythropoietic porphyrias is a rare inherited metabolic disorder that could lead to painful photosensitivity. "Bitopertin, Disc's lead asset, represents a compelling value proposition for investors. Bitopertin has demonstrated a very clean, relatively de-risked safety profile, backed by extensive Ph 3 data from Roche (previous owner) in schizophrenia," Seigerman wrote in a Friday note. "Clean safety combined with its known mechanism, strong preclinical data, and potential launch into a market underserved by the current standard of care treatment present an opportunity for meaningful upside to shares with a good risk/reward profile," Siegerman added. IRON YTD mountain Disc Medicine shares YTD Last year, Disc Medicine went public in a reverse merger with biotechnology company Gemini Therapeutics, trading under the ticker symbol "IRON." Disc Medicine shares are up 8% this year. And, they may have even more upside. The analyst's $40 price target means that Disc Medicine shares can jump 84% from Wednesday's closing price. Other treatments that appear promising include DISC-0974, which treats anemia of inflation , that could be used together with care for myelofibrosis-related anemia and anemia in chronic kidney disease, according to the note. In the near term, the analyst expects that interim Ph 2 BEACON data for patients with erythropoietic protoporphyria (EPP) or X-linked protoporphyria (XLP), expected in the first half of 2023, will drive upside. "Our upside valuation is driven by higher PoS for bitopertin, assuming positive Ph 2 readout. This scenario assumes a 60% probability of success for bitopertin in EPP/XLP, which assumes positive clinical readouts in 2023," read the note. —CNBC's Michael Bloom contributed to this report.