H.C. Wainwright raised its price target for Verastem (NASDAQ:STM) to $6.50 from $5, ahead of a highly anticipated top-line readout from the Phase 3 DUO study of duvelisib for the treatment of relapsed/refractory chronic lymphocytic leukemia (CLL) expected in mid-2017. The stock closed at $1.51 on March 23.
DUO is a 300-patient, randomized, controlled study, comparing the use of duvelisib monotherapy to ofatumumab, an anti-CD20 antibody, which is marketed as Arzerra by Novartis for the treatment of CLL. The primary endpoint is progression-free survival (PFS), with secondary endpoints that include overall response rate and overall survival.
Analyst Swayampakula Ramakanth writes that based on results from earlier- stage studies in CLL as well as the previously completed DYNAMO study in indolent non-Hodgkin’s lymphoma, “we believe that DUO is highly likely to meet its primary PFS endpoint.”
While many investors have doubts regarding duvelisib’s commercial outlook in the competitive CLL indication, “we believe that, even with less-than-stellar results from DUO, the drug has the potential to capture a material portion of the highly lucrative market for second/third-line CLL treatments,” he added. “Therefore, we expect positive results from the DUO study to be a significant catalyst for the company.”
