Citi has opened 90-day catalyst watches on 4 of its buy-rated biotechs, underscoring their potential to generate main catalysts in This fall. Three of these names, Apellis Prescribed drugs (NASDAQ:APLS), Eiger BioPharmaceuticals (NASDAQ:EIGR), and Merus N.V. (NASDAQ:MRUS), have outperformed the ~33% selloff within the biotech area, whereas the opposite Arcus Biosciences (NYSE:RCUS) has underperformed, as shown in this graph.
Citi analysts led by Yigal Nochomovitz retain APLS because the agency’s highest conviction decide naming the inventory as its prime choice within the SMID-cap biotech area. The group points an $86 per share goal for APLS forward of the PDUFA date for its lead product candidate, pegcetacoplan, on Nov. 26 for geographic atrophy ((G.A.)).
The agency tasks a 90% likelihood for pegcetacoplan to win FDA approval with a broad label on or earlier than the PDUFA date and forecasts the occasion to generate ~30%+ upside for the Waltham, Massachusetts-based biotech.
As well as, Citi names APLS as a potential buyout goal given the clear synergistic advantages with the eyecare merchandise of pharma giants equivalent to Novartis AG (NVS) (OTCPK:NVSEF), Roche (OTCQX:RHHBF) (OTCQX:RHHBY) and Bayer (OTCPK:BAYZF) (OTCPK:BAYRY).
In September, APLS shares spiked after the corporate’s Chief Govt Cedric Francois mentioned on the Citi BioPharma Convention that the FDA wouldn’t conduct an AdCom assembly to resolve on the advertising and marketing application for pegcetacoplan.
Nochomovitz and the group are additionally constructive on topline Section 3 knowledge EIGR is ready to reveal earlier than year-end for its lead asset lonafarnib in opposition to Hepatitis Delta Virus (HDV). Calling EIGR “an under-the-radar title,” Citi points a $23 per share goal on the commercial-stage biotech and thinks that the purchase aspect has but to understand its prospects in HDV.
The group expects the inventory so as to add over 100% in a best-case situation the place lonafarnib-containing regimens outperform not solely placebo with statistical significance but additionally rival remedy Gilead’s (GILD) bulevirtide, which is currently under FDA review.
Primarily based on favorable Section 2 knowledge, the analysts mission a 60% likelihood of success for the pivotal trial and inventory to commerce at money (~$2 per share) within the occasion of a setback.
Citi additionally opened a constructive catalyst watch on MRUS with a 12-month per share goal of $34 forward of the preliminary Section 1 dose-escalation knowledge the Dutch biotech plans to reveal for its most cancers candidate MCLA-129 on Oct. 26 at a medical occasion.
Arguing that the inventory mirrored “little or no credit score” for MCLA-129 on Wall Road and in its mannequin, the group tasks an $8 per share likelihood weighted upside for MRUS forward of the information readout.
The analysts suppose that whereas amivantamab, a rival most cancers remedy from Johnson & Johnson (JNJ), has de-risked the mechanism of motion of MCLA-129, sure properties make MCLA-129 a drug with larger efficiency regardless of the similarities between the 2 bispecific antibodies.
On Wednesday, MRUS introduced the publication of interim knowledge from the continuing Section 1/2 trial the place MCLA-129 is present process research for sufferers with superior non-small cell lung most cancers (NSCLC) and different stable tumors.
The information indicated that out of 13 evaluable sufferers, two NSCLC sufferers with EGFR mutations had partial responses and 4 demonstrated confirmed secure illness. Extra knowledge from the dose escalation cohort is anticipated on the poster presentation on Oct. 28.
Nochomovitz and the analysts anticipate ~$3 per share probability-adjusted upside for RCUS from the topline readout the biotech and its accomplice Gilead (GILD) plan to reveal from the Section 2 ARC-7 research for domvanalimab earlier than year-end. The group points a 12-month value goal of $40 on RCUS.
The three-arm 150-patient trial is designed to guage the anti-TIGIT monoclonal antibody in a mixture routine in first-line metastatic NSCLC with PD-L1 protein expression (≥50%).
The analysts argue that the readout might be value-generating for the 2 collaborators in addition to different builders within the TIGIT area, given the setback Roche (OTCQX:RHHBY) suffered in Could with the failure of its late-stage research for anti-TIGIT drug tiragolumab in lung cancer.