Prometheus Biosciences Inc. (RXDX:NASDAQ) earned a rating upgrade and target price increase from Oppenheimer based on Prometheus' significant news relayed in the recent management update, analyst Jeff Jones reported in a Dec. 7 research note.
The brokerage/investment bank now rates Prometheus Outperform and assigns it a $50 per share price target, up from $35. In comparison, the biotech's share price today is about $33.14.
California-based Prometheus develops therapeutics and companion diagnostics addressing unmet needs in gastrointestinal and autoimmune diseases.
Jones relayed the three key messages Prometheus delivered in its recent update.
One, management revealed that Prometheus' therapeutic candidate, PRA023, showed efficacy in the recent Phase 1 results and differentiated itself from Pfizer’s PF-06480605, Jones wrote. Comparing the two, PRA023 showed a less than or equal to 20% immunogenicity response to clinically meaningful doses whereas PF-06480605, in a Phase 2 study, demonstrated a greater than 80% anti-drug antibody response (the smaller the response number, the better).
Management also pointed out that PRA023 binds both active trimer and inactive monomer forms of TL1A, and PF-06480605 only binds the active trimer form.
"We are optimistic that their different target engagement profiles could distinguish these products in the clinic, accentuating the importance of the Q4/22 clinical readout," Jones commented.
Two, management announced a third indication for PRA023, systemic sclerosis-associated interstitial lung disease, and plans for an associated Phase 2 trial. For this, enrollment of patients from about 50 global sites is slated to start in Q1/22 and will take about a year to complete.
"Data are expected to support progression directly into a Phase 3 pivotal study," noted Jones.
About 80,000 people in the U.S. have systemic sclerosis, and about half of those develop interstitial lung disease, the analyst noted. Among that population there is an unmet need for more efficacious treatment than the existing ones. Thus, Oppenheimer calculates Prometheus could generate more than $400 million in U.S. net sales of PRA023 within five years of it being put on the market.
Three, Prometheus has advanced its subcutaneous PRA023 past the preliminary testing stage, in which it had success administering PRA023 in concentrations as high as 200 milligrams per milliliter. The biotech will conduct human bioavailability studies on the formulation early next year, aiming to complete them in time for the subcutaneous PRA023 to be used in upcoming pivotal studies.
This progress with the subcutaneous formulation "suggests the potential for a simple, patient-administered auto-injector at commercialization," Jones pointed out.
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