Why Viela Bio Inc (NASDAQ: VIE) stock is going gangbusters today

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Viela Bio Inc (NASDAQ: VIE) stock surged over 19.92% on 17th December, 2019 (Source: Google finance) after the company received the buy rating from the analyst Jeffrey Hung of Morgan Stanley, with a price target of $35. The analyst consensus on Viela Bio currently is a Strong Buy with an average price target of $37.

Moreover, the company has recently initiated Phase 2b trial of VIB4920 as VIE dosed the first patient for the treatment of Sjögren’s syndrome, which is achronic, systemic autoimmune disease that involves inflammation and destruction of the salivary and lacrimal glands which leads to severe dryness and chronic pain. Currently there are no approved disease-modifying therapies. The patients with this disease suffer from debilitating fatigue and extensive mouth and eye dryness, and in some cases, lung and kidney disease along with an increased risk of lymphoma. This trial is considered as an important milestone in the research and development efforts involving the CD40/CD40L co-stimulatory pathway. The treatment with the product candidate VIB4920, which is a fusion protein designed to bind to CD40L is expected to address immune overactivation in T and B cell-driven diseases such as Sjögren’s syndrome

Meanwhile, the company is planning to submit an investigational new drug (IND) application and initiate a pivotal trial in myasthenia gravis in the first half of 2020. Further, the company intends to submit an IND and initiate a Phase 2b trial in IgG4-Related Disease in the first half of 2020. Furthermore, Viela is planning to start a Phase 2 proof-of-concept study to explore the potential of inebilizumab, used alone or in combination with VIB4920, to reduce levels of alloantibodies in kidney transplant candidates thereby improving transplant outcomes before the end of 2019.

On the other hand, the company has raised approximately $172.6 million through an IPO of 9,085,000 shares of common stock, which included 1,185,000 shares sold pursuant to the exercise in full by the underwriters of their option to purchase additional shares, at a price to the public of $19 per share. Viela has reported cash, cash equivalents and current marketable securities of $198.2 million as of September 30, 2019. This does not include net proceeds from the IPO of approximately $157.2 million, which was subsequent to September 30, 2019. In addition, the upfront payments from the Company’s strategic partnerships of $35 million is expected to come before the end of 2019, which was subsequent to September 30, 2019.

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