HCW starts Principia Biopharma at buy; PT $55

H.C. Wainwright initiated coverage of Principia Biopharma (NASDAQ:PRNB) with a “buy” rating and $55 price target. The stock closed at $37.61, up $4.42, on July 1.

“Core to our thesis is Principia’s standing, in our view, as more than a dermatology company with broad opportunities and Big Pharma partner validation already,” writes analyst Joseph Pantginis.

Principia currently is addressing several indications, led by autoimmune disorders, and its Bruton’s tyrosine kinase (BTK) inhibitor program. BTK is a crucial mediator of B-cell maturation and reactivity.

The company bases its overall development efforts on its proprietary and novel drug discovery platform, named covalency. “This is a promising strategy to better design small molecule inhibitor drugs showing durable responses while avoiding off-target toxicity, a common concern of peers,” Mr, Pantginis said.

“We think a good reason to own the stock now is the approaching key Phase 2 data readouts in pemphigus vulgaris and immune thrombocytopenia later this year, addressed by the company’s lead BTK inhibitor asset, PRN1008,” he added. Proof-of-concept evidence has been already delivered in these two indications.

As for the other programs, Mr. Pantginis sees value from PRN2246/SAR442168, partnered with Sanofi, in a Phase 2 trial for multiple sclerosis, and PRN1371 in fibroblast growth factor receptor mutated bladder cancers, “but [they] only contribute modestly to our valuation due to their early nature.”

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