NEW YORK – Investment bank Oppenheimer on Thursday initiated coverage of Sera Prognostics with an Outperform rating and a price target of $19 per share.
In a note to investors, Oppenheimer analyst Kevin DeGeeter wrote that the company's primary product, called PreTRM, has the potential "to create a new market for blood-based testing to assess preterm birth risk."
The test uses the ratio of insulin-like growth factor-binding protein 4 to sex hormone-binding globulin to predict preterm birth risk.
According to DeGeeter, analytical and clinical validation studies "suggest PreTRM is additive to clinical features in assessing risk," and added that coverage from insurer Anthem "provides a template for future coverage decisions."
Anthem has agreed to cover PreTRM for its members and raise awareness of the test under a commercial partnership with Sera.
"While we acknowledge adoption is in [the] early stages, we view Anthem's involvement both as an early adopter and investor in Sera as a unique setup that should reduce commercial execution risk," DeGeeter wrote.
The investment bank's outlook for Sera "assumes another top-five private payor provides a positive coverage decision in 2022, contributing to PreTRM sales volume in 2023," he wrote.
The Salt Lake City-based diagnostic company went public in July at $16 per share.
In August, investment banks William Blair and Cowen initiated coverage of Sera with Outperform ratings.