H.C. Wainwright initiated coverage of Aprea Therapeutics (NASDAQ:APRE) with a “neutral” rating and $30 price target. The stock closed at $37.90 on June 19.
“We see more downside risk heading into pivotal data,” writes analyst Andrew Fein, noting that a topline readout from the Phase 3 study in myelodysplastic syndrome (MDS) is expected in the fourth quarter of 2020.
The randomized, open label, controlled pivotal trial is evaluating the company’s APR-246 plus azacitidine, a chemotherapy drug, against azacitidine in hypomethylating naïve TP53 MDS patients.
“Although we believe the trial should likely hit its primary endpoint of a complete response rate, existing evidence does not suggest an elevated probability of success of increased duration of response, a key measurement required for regulatory approval,” he added.
Even with a successful approval in MDS, Mr. Higgins said the upside for Aprea is likely capped because of a small addressable market in TP53 mutant patients; competitive threats; patent vulnerability; and potentially limited indication expansion opportunity.