JP Morgan, BTIG, Jefferies Initiate Coverage of BillionToOne

Original from: genomeweb

JP Morgan, BTIG, and Jefferies announced separately Monday that they have initiated coverage of molecular diagnostics firm BillionToOne.

JP Morgan initiated coverage with an Overweight rating and price target of $150, while BTIG initiated with a Buy rating and a $160 price target and Jefferies with a Hold rating and price target of $117.

BillionToOne went public on Nov. 6 at a price of $60 per share. In Monday morning trading on the Nasdaq, the company's shares were down 8 percent at $120.08.

In a note to investors, JP Morgan analyst Casey Woodring cited strong demand for the company's NIPT testing technology, including its single-gene NIPT (sgNIPT) product, which allows clinicians to screen for single-gene autosomal recessive conditions without a paternal sample. The bank estimates that BillionToOne's share of the NIPT market has grown from high single-digits to the low- to mid-teens since 2023 and added that it "is well positioned to outperform in an increasingly competitive and commoditized aneuploidy NIPT market."

The JP Morgan note also highlighted the potential of the company's oncology portfolio where it offers its Northstar Select liquid biopsy test for guiding therapy in stage III and IV cancer patients and its Northstar Response test for tracking treatment response. It is also developing a pan-cancer minimal residual disease (MRD) test that it expects to launch in 2026.

In a note to investors, BTIG analyst Mark Massaro similarly observed the growth of BillionToOne's sgNIPT business as well as the potential of its oncology products. Massaro highlighted the company's single-molecule detection technology and noted that the company believes this will remain its competitive advantage "particularly in markets like oncology and in areas like minimal residual disease (MRD) testing, therapeutic monitoring, and therapy selection."

BillionToOne's molecular counting technique, called Quantitative Counting Templates (QCT), uses synthetic DNA molecules as reference standards prior to amplification, which allows users to calculate absolute amounts of target DNA fragments in a sample, with higher levels of multiplexing compared to methods like digital PCR.

Jefferies analyst Tycho Peterson likewise noted BillionToOne's strong presence in NIPT and the solid technological foundation underpinning its oncology business. He wrote, however, that Natera's recently announced 20-gene Fetal Focus assay could present competition in the sgNIPT space and that its oncology strategy "will likely require a multiyear effort to execute."

Both Woodring and Massaro observed that BillionToOne currently trades at a premium compared to its peers but said the premium is justified, with Woodring citing the firm's "leading growth profile and long runway alongside a clear path to a leading operating margin profile," and Massaro projecting 91 percent revenue growth year over year for the company in 2025 and noting that it "may become one of the most profitable specialty labs."

Woodring cautioned, however, that delays in building out BillionToOne's sales force or in development of its planned MRD test could present downside risk to the bank's projections.

Peterson, meanwhile, noted that at their current price the company's "shares already discount much of the long-term upside, assuming multiple parity to oncology-focused peers."

"We await evidence of pipeline execution and share gains, in particular, within oncology, as key to turning more constructive," he wrote.

Source from: JP Morgan, BTIG, Jefferies Initiate Coverage of BillionToOne