Lake Street doesn’t expect Inotiv financial impact from FDA ‘headline noise’

Lake Street notes that yesterday the FDA announced it plans to phase out animal testing requirements for monoclonal antibodies and other drugs, adding that at this point there are “far more questions than answers.” Inotiv (NOTV) views itself as a drug discovery service provider, not an animal provider, but animals are a necessary requirement that Inotiv has brought in house to support its customer’s drug development processes, the analyst added. If a reduction in animals is achieved, the firm thinks Inotiv will be “agile in offering services that allow for a reduction in animal testing” and it argues that while the FDA plans will “cause headline noise,” it does not expect a near or intermediate-term impact to Inotiv’s business. The firm reiterates a Buy rating and $6 price target on Inotiv shares.