Roth Capital Partners has resumed coverage of CymaBay Therapeutics (NASDAQ:CBAY) with a “buy” rating and $4 price target. The stock closed at $1.57 on Friday.
“In our opinion, while catalysts for the next 12-to-18 months are limited, the potential partnering of arhalofenate could be a significant driver for the shares, enhancing CymaBay’s coffers, validating the company’s approach, bridging the catalyst gap until additional data can be gleaned from MBX-8025’s HoFH and PBC programs, and increasing confidence in management’s execution,” writes analyst Sa’ar Yaniv.
Arhalofenate, for the potential treatment of gout, has been studied in over 1,100 patients, and following successful end-of-Phase 2 discussions with the FDA, is Phase 3 ready. “We believe that a $100-million partnership with a $30-million to $50-million upfront payment would be worth $2-to-$4 a share,” he added.
The company’s MBX-8025 candidate in primary biliary cholangitis (PBC) demonstrated encouraging efficacy in a Phase 2b trial, but the study was stopped early after three patients experienced elevated transaminase alanine levels.
CymaBay now plans to conduct additional dose-finding studies, including lower doses and dose titration. “We expect additional insight into the company’s plan in the second half of 2016,” Mr. Yaniv said.
In addition, MBX-8025 recently demonstrated encouraging efficacy in 12 homozygous familial hypercholesterolemia (HoFH) patients. However, the decrease in LDL was relatively mild and elevated levels of PCSK9 were observed, which could obfuscate MBX-8025’s efficacy, he added.
The company plans on conducting additional studies, perhaps on top of baseline PCSK9 therapy, to establish the appropriate patient population and efficacy.
