BioTuesdays

Maxim starts Cyclo Therapeutics at buy; PT $12

Maxim Group initiated coverage of Cyclo Therapeutics (NASDAQ:CYTH) with a “buy” rating and $12 price target. The stock closed at $3.85 on Dec. 16.

Cyclo is developing a Phase 3-ready hydroxypropyl beta cyclodextrin-based drug candidate, Trappsol Cyclo, to treat Niemann-Pick disease type C (NPC), a rare progressive genetic disorder characterized by an inability of the body to transport cholesterol and other fatty substances, or lipids, inside cells.

Analyst Jason McCarthy, Ph.D., writes that Trappsol Cyclo has exhibited positive early-stage data in NPC patients in Phase 1 and Phase 1/2 studies, “suggesting the amelioration of both systemic and neurologic features of NPC.”

The company’s Phase 1/2 study is scheduled for completion in the first quarter of 2021 and a Phase 3 trial is being planned. Completion of the Phase 1 extension study is expected the first quarter of 2022, with trial updates to be presented at the 2021 WORLD symposium in February 2021.

Dr. McCarthy said NPC remains a “challenging indication” with several companies missing the mark, including Mallinckrodt and Orphazyme, “though the latter has filed for approval still and the outcome in 2021 could impact Cyclo shares, in our view.”

He said Cyclo has used the lessons from others to bolster its own program in NPC, mitigating risk and increasing the probability of success. “Can Cyclo capture the clinical success that Mallinckrodt and Orphazyme were aiming for? We like the risk/reward profile and see upside at the current valuation,” Dr. McCarthy added.

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