BTIG launched coverage of Aerovate Therapeutics (NASDAQ:AVTE) with a “buy” rating and $24 price target. The stock closed at $9.40 on Feb. 10.
Aerovate is focused exclusively on developing a dry powder inhaled formulation of imatinib for pulmonary arterial hypertension (PAH).
Analyst Julian Harrison writes that more than a decade ago, Novartis made an attempt at life-cycle management for its blockbuster TKI Gleevec (oral imatinib) by pursuing development in PAH.
In a Phase 3 program, oral imatinib demonstrated clear activity in PAH. However, systemic adverse events and operational issues made long-term outcomes data confusing, he added.
“Data in hand, Aerovate picks up where Novartis left off with a dry powder inhaled formulation of imatinib that optimizes bioavailability in the lung where the drug is needed most while minimizing the troublesome systemic exposure,” Mr. Harrison said.
With an enterprise value of less than $70-million and cash into the second half of 2025 (through Phase 2b and Phase 3 data), “we like the fundamental setup for this potential blockbuster opportunity and see an attractive entry point where the stock currently trades,” he added.
Mr. Harrison said the key validating catalyst is likely the Phase 2b readout of AV-101 in mid-2023 and “we expect interest to increase as the program’s existing validation becomes better understood by investors.”
