Ladenburg starts Reneo Pharma at buy; PT $45

Reneo Therapeutics

Ladenburg Thalmann initiated coverage of Reneo Pharmaceuticals (NASDAQ:RPHM) with a “buy” rating and price target of $45. The stock closed at $7.99 on Nov. 19.

Reneo’s clinical stage asset, REN001 is in development for the treatment of primary mitochondrial myopathies (PMM), McArdle disease, and long-chain fatty acid oxidation disorders (LC-FAOD). 

Through activation of peroxisome proliferator-activated receptor delta (PPARd), REN001 enhances fatty acid oxidation for energy production, which can potentially be used to treat genetic metabolic myopathies, writes analyst Matthew Kaplan.

Promising Phase 1b data showed REN001 improved walk distance and exercise capacity along with PMM patient-reported symptoms. The Phase 2b STRIDE trial is currently enrolling PMM patients with mitochondrial DNA mutations; an open label extension is expected to begin in the first half of 2022, with topline data from both studies expected in 2023.

In McArdle disease, a Phase 1b trial completed enrollment in July 2021, and “we look forward to the topline data expected in the first quarter of 2022,” Mr. Kaplan said. 

In LC-FAOD, a Phase 1b trial completed enrollment in November 2021, with topline data expected in the second quarter of 2022. Reneo is also running a prospective natural history study of LC-FAOD, which is expected to complete enrollment by the end of 2021, with topline data expected in the second quarter of 2022. 

“We believe by leveraging PPARd activation in multiple indications makes REN001 a potential pipeline in a product,” Mr. Kaplan said. 

“With a market cap of $199-million and cash of $158-million as of Sept. 30, 2021, we believe Reneo currently represents a very attractive investment opportunity,” he added.