H.C. Wainwright initiated coverage of Sunesis Pharmaceuticals (NASDAQ:SNSS) with a “neutral” rating and price target of 50 cents. The stock closed at 32 cents on Dec. 19.
Earlier this month at the ASH annual meeting, Sunesis reported interim data from the first two cohorts in its ongoing Phase 1b study of vecabrutinib in B-cell malignancy. The drug candidate demonstrated proof-of-concept in Bruton’s tyrosine kinase (BTK) inhibition in patients who had received prior BTK inhibitors, with a reasonable toxicity profile.
Analyst Andrew Fein writes that based on prior pharmacodynamics studies, the company expects that clinical responses may be seen in the 100mg to 300mg dose range (cohorts 3 and 4).
“While we think the study should successfully proceed into the third dose cohort, and believe that dose levels of greater than or equal to 100mg should more likely generate clinical responses, we currently lack visibility into the likelihood of observing such responses,” he added.
Nevertheless, he said that the upcoming clinical updates of vecabrutinib should provide more clarity around the drug’s clinical potential, and may well be value-inflecting for Sunesis.
Mr. Fein’s current price target is based on vecabrutinib’s potential in relapsed/refractory chronic lymphocytic leukemia, with a probability of success (POS) of 8%, which is in line with the historical POS of Phase 1b/2 oncology studies.
However, he said that an increase in the POS to 15% “would allow us to arrive at a price target of $6, which represents significant upside to Sunesis’ current price,” he added.
