HCW starts Theseus Pharma at buy; PT $22

H.C. Wainwright launched coverage of Theseus Pharmaceuticals (NASDAQ:THRX) with a “buy” rating and price target of $22. The stock closed at $5.20 on June 29.

“We believe pan-inhibition could be the key to success in gastrointestinal stromal tumors (GIST),” writes analyst Andrew Fein. Although GIST treatment has remained static over the past number of years, “we see interest in the space reigniting with the entrance of a pan-tyrosine kinase inhibitor (KIT) inhibitor (Theseus’ THE-630), with a high likelihood of [fifth-line] approval, with earlier line potential,” he added.

While patience is needed for unlocking the true prize of breaking into second-line GIST, “our deep-dive analysis into the structural basis of KIT resistance reaffirms our faith in a pan-inhibition strategy long term,” Mr. Fein said.

He believes THE-630 can adequately tackle resistance in GIST through the use of novel and dynamic molecular touchpoints, which aim to ensure retention of inhibition, regardless of the geometric changes in the binding pocket once mutations arise.

Outside of molecular design, Mr. Fein said what sets Theseus’ approach apart is its proprietary predictive resistance assay (PRA), a novel cell-based drug screening platform that “replicates the physiological milieu, where the effects of macromolecular crowding are leveraged in the selection of a lead candidate.”

THE-630 is currently being evaluated in a Phase 1 trial for GIST, with initial readout expected in the first half of 2023. “We are optimistic about THE-630 demonstrating preliminary objective response rate signals based on THE-630’s performance on both the PRA assay as well as in vivo models, where it strongly inhibits all pathogenic KIT mutations,” Mr. Fein said.