In a Sept. 17 research note, H.C. Wainwright & Co. analyst Douglas Tsao reported that Rezolute Inc. (RZLT:NASDAQ) advanced its two lead drug candidates to the point of topline data readouts expected in Q1/22.
The first compound is RZ358, which Rezolute is developing as a treatment for congenital hyperinsulinism, to be delivered via weekly or biweekly infusions. Recently, Rezolute began dosing the cohort of patients receiving 3 milligrams per kilogram (mg/kg) in its Phase 2b RIZE trial. Next, it will treat the group getting 9 mg/kg once the dose escalation review committee approves it.
In commencing the Phase 2b dosing, Rezolute solidified its development lead over Crinetics, which is advancing an oral small molecule sst5 agonist for the same indication. Crinetics just released Phase 1 data, an event that overshadowed Rezolute's earnings report and pressured its shares.
"That head start [of Rezolute], as well as the elegant mechanism of RZ358, should ensure it gets a strong beachhead in the congenital hyperinsulinism market, if not market leadership, in our view," Tsao wrote.
Rezolute's second drug is RZ402, a plasma kallikrein inhibitor the biopharma is developing for diabetic macular edema. Results of its MAD trial, in progress, also are expected in Q1/22.
"Although still very early in development, RZ402 has solid mechanistic rationale for use in diabetic macular edema or other retinopathies, with preclinical data showing similar efficacy to the standard of care, anti-VEGF monoclonal antibody, aflibercept. The latter, however, requires intravitreal injections whereas RZ402 would be administered orally.
"We could see use [of RZ402] as a first line, prophylaxis or even combination therapy," Tsao wrote.
As for Rezolute's Q4 FY21 financial results, Tsao reported the company posted a $6.5 million ($6.5M) net loss, slightly better than H.C. Wainwright's $7.1M estimate. Research and development expenses during the quarter were $4.4M, just above the financial institution's $4M estimate. Rezolute ended fiscal year 2021 with $41M of cash and cash equivalents.
H.C. Wainwright has a Buy rating and a $21 per share target price on Rezolute, the current share price of which is about $8.83.
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Disclosures from H.C. Wainwright, Rezolute Inc., Sept. 17, 2021
Analyst Disclosure: I, Douglas Tsao , certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst’s household has a financial interest in the securities of Rezolute, Inc. and Crinetics Pharmaceuticals, Inc. (including, without limitation, any option, right, warrant, future, long or short position). As of August 31, 2021 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Rezolute, Inc. and Crinetics Pharmaceuticals, Inc.
Neither the research analyst nor the Firm knows or has reason to know of any other material conflict of interest at the time of publication of this research report. The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The firm or its affiliates received compensation from Rezolute, Inc. and Crinetics Pharmaceuticals, Inc. for non-investment banking services in the previous 12 months.
The Firm or its affiliates did not receive compensation from Rezolute, Inc. and Crinetics Pharmaceuticals, Inc. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
The Firm does not make a market in Rezolute, Inc. and Crinetics Pharmaceuticals, Inc. as of the date of this research report.
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