Cantor Fitzgerald has high hopes for the company's Aramchol
The shares of Galmed Pharmaceuticals Ltd (NASDAQ:GLMD) -- a company focused on treating liver diseases, including Non-Alcoholic Steatohepatitis (NASH) -- are skyrocketing today, thanks to some very bullish analyst attention. Specifically, Cantor Fitzgerald launched coverage on GLMD with an "overweight" rating and a whopping $59 price target -- implying expected upside of nearly 460% to the equity's close of $10.55 on Wednesday. Against this backdrop, call volume on the pharma stock is running red-hot, and GLMD shares are up 31.4% to trade at $13.86.
In a note to clients, Cantor said Galmed "is undervalued in relation to its peers in the NASH space," and waxed optimistic on the prospects for the company's Aramchol, estimating that its "opportunity in NASH is worth $1.2 billion." There are currently no approved therapies to treat NASH, and Galmed expects to meet with the Food and Drug Administration (FDA) about Phase 3 trials in the fourth quarter.
In fact, in mid-June the FDA granted Aramchol fast-track status, sending Galmed Pharmaceuticals stock skyrocketing to all-time highs. Since peaking at $27.06 on June 12, the equity lost steam after announcing a planned stock offering, but still sports a year-over-year gain of more than 100%, and is far from closing the aforementioned bull gap. Further, GLMD stock is set to close atop its 10-day moving average for the first time since June 20, after pulling back to the $10-$10.50 region -- an area that provided a foothold earlier this year.
Although absolute options volume runs light on GLMD, bulls are coming out of the woodwork today. So far, nearly 600 call options have changed hands -- 52 times the average intraday volume -- compared to fewer than 100 puts. In fact, today's call volume not only sets an annual high for Galmed, but is more than 10 times the previous high of just 55 contracts, set on July 6.
Digging deeper, the July 12.50 call has been most popular, and it appears traders are buying to open the contracts. By doing so, they expect GLMD shares to extend their retreat north of $12.50 through the close on Friday, July 20, when front-month options expire.