Maxim Group initiated coverage of Ayala Pharmaceuticals (NASDAQ:AYLA) with a “buy” rating and $22 price target. The stock closed at $9 on Dec. 17.
Ayala is developing two gamma-secretase inhibitors – AL101 and AL102 – which were in-licensed from Bristol Myers, targeting the Notch signaling pathway, a well-documented driver of many cancers.
AL101 is being evaluated in adenoid cystic carcinoma in the Phase 2 ACCURACY study, and in triple-negative breast cancer in the Phase 2 TENACITY study.
AL102 is being evaluated in desmoid tumors in the Phase 2/3 RINGSIDE study and in multiple myeloma. In addition, Ayala is on track to initiate another Phase 2 study of AL101, in T-cell acute lymphoblastic leukemia in 2022, writes analyst Naureen Quibria, Ph.D.
“If the RINGSIDE study is positive for AL102, it may be registration-enabling,” Dr. Quibria said. “AL101 also has the potential for an expedited regulatory path,” she added, noting that Ayala is expected to meet with the FDA at the end of the Phase 2 ACCURACY study in 2022.
If several key catalysts in the next 12 months are positive, the “data should further de-risk each asset and shed greater light on their respective clinical profiles,” Dr. Quibria said. She said that with multiple differentiated studies to provide catalysts in 2022, and about $41-millon of cash on the balance sheet to provide a runway until 2023, and with a market cap of about $125-million, “we view the stock as undervalued.”
