BioTuesdays

HCW starts Aeglea BioTherapeutics at buy; PT $20

H.C. Wainwright launched coverage of Aeglea BioTherapeutics (NASDAQ:AGLE) with a “buy” rating and $20 price target. The stock closed at $6.92 on May 21.

Analyst Edward White writes that his initiation is based on the outlook for the company’s pipeline that includes human enzyme therapeutics to treat rare genetic diseases and cancer, the most important of which is pegzilarginase, expected to enter a Phase 3 program this quarter.

Pegzilarginase is being developed to treat the rare genetic disease, Arginase 1 Deficiency (ARG1-D), as well as some cancers that have a metabolic dependence on arginine.

The company has also engineered other next generation human enzymes potentially for other rare genetic diseases, with limited treatment options.

Mr. White said two additional drugs are expected to enter the clinic in 2020, including AEB4104 to treat homocystinuria and AEB5100 for cystinuria.

Homocystinuria is an inherited disorder in which the body is unable to process certain building blocks of proteins (amino acids) properly. Cystinuria is a condition characterized by the build-up of the amino acid cystine, a building block of most proteins, in the kidneys and bladder.

“We think the capital raise in February removes the financial overhang from the stock as the company believes it has a cash runway through the first quarter of 2021, the same quarter that top line pivotal data are expected,” Mr. White said.

With several potential catalysts over the next 12 months, “we believe the stock represents an attractive investment opportunity at the current share price,” he added.

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