Bank of America Securities initiated coverage of Apnimed Inc (NASDAQ: APMD) on Monday with a buy recommendation and a $41 price target, representing a 59.9% premium to the stock’s last close of $25.63.
The bank’s valuation is based on a risk-adjusted discounted cash flow analysis of Apnimed’s sole asset, Oxnimbi (AD109), an oral therapy targeting the neuromuscular dysfunction underlying obstructive sleep apnea. Analyst Jason Gerberry highlighted the drug’s differentiation from continuous positive airway pressure (CPAP) devices and obesity-focused GLP-1 treatments, positioning it as a potential first-line therapy for the estimated 10.5 million diagnosed but untreated patients in the U.S.
BofA projects peak sales of approximately $2 billion in nominal terms and $1.7 billion on a risk-adjusted basis, supported by Phase 3 trial results showing reductions of 34% to 44% in the Apnea-Hypopnea Index (AHI). The bank expects a high probability of regulatory approval, with a Prescription Drug User Fee Act (PDUFA) target action date set for February 28, 2027.
Apnimed’s initial public offering, priced between $14 and $16 per share, is anticipated to price in the upper half of that range due to strong institutional demand that reportedly exceeded the available shares. The company’s gross margins are projected to remain at 94%, reflecting its asset-light business model.
Apnimed’s shares fell 19% in the week prior to the coverage initiation, though the decline followed a broader market pullback in biotechnology equities.
