Canaccord rates PYC a Buy with a target price of $0.22, possibly rising to $1.20
PYC is advancing RNA-based treatments for rare genetic diseases
Trial results expected in 2024/25, with potential market launch by 2028
Canaccord Genuity has slapped a Buy rating on PYC Therapeutics (ASXYC) with a target price of 22c (vs current price of 11c).
The broker also said that if clinical outcomes are successful and the company’s assets are further de-risked, the stock’s potential upside could be as high as $1.20.
PYC is a biotech company working on advanced RNA-based treatments to help people with rare genetic diseases such as severe eye and kidney diseases.
The clinical-stage company is now at a pivotal point in its clinical trials, according to Canaccord, making PYC a compelling investment opportunity.
The company has just concluded the quarter with $66.8 million in cash, following a successful capital raise in March.
This financial position provides a solid foundation for advancing its key clinical and preclinical programs.
PYC’s assets
PYC is poised for significant developments in the near term, particularly with its three main clinical assets:
1/ VP-001 (for Retinitis Pigmentosa 11 – RP11)
PYC’s VP-001 is a drug that’s progressing through multiple concurrent clinical trials in patients with a blinding eye disease called Retinitis Pigmentosa type 11 (RP11).
RP11 is a rare and severe eye disease that leads to blindness.
The company has shown encouraging early-stage data, with positive results from both human trials and animal models (see more below).
Success here could support the initiation of a registrational study expected in 2025, with potential commercialisation by 2028.
PYC-001 (for Autosomal Dominant Optic Atrophy – ADOA)
PYC-001 is a drug being developed to treat Autosomal Dominant Optic Atrophy (ADOA), also a rare eye disease that causes blindness in children.
It works by increasing the levels of a protein called OPA1 in the retina. Recent studies in non-human primates have shown that PYC-001 can safely boost OPA1 levels, supporting its potential as a treatment for ADOA.
This asset and clinical trials associated with it are generating much excitement.
The focus of the trials is on human safety data, which could provide crucial insights into the therapy’s viability. Positive safety readouts are expected in 2024/25.
PYC-003 (for Autosomal Dominant Polycystic Kidney Disease – ADPKD)
PYC-003 is a drug candidate designed to treat Autosomal Dominant Polycystic Kidney Disease (ADPKD).
ADPKD is a genetic disorder where cysts form in the kidneys, leading to kidney enlargement and impaired function over time.
The trial of PYC-003 has demonstrated its safety and effectiveness in treating the kidneys during non-human primate studies. This promising data supports moving PYC-003 into human trials for further testing.
While this program is slightly behind VP-001 and PYC-001 in development, it is highly anticipated due to the large market size (approximately 140,000 patients in the US) and the substantial clinical unmet need.
The only approved therapy for ADPKD carries a Black Box safety warning, highlighting the demand for a safer alternative. Phase 1/2 trials are projected to start in 2025.
“It is the biggest contributor to PYC’s valuation, and we expect Phase 1/2 to commence in 2025,” said the note from Canaccord.
Near-term catalysts
On Monday, PYC reported that two patients receiving a 75-microgram dose of VP-001 showed significant improvements in vision.
This follows earlier results where two other patients improved after receiving a 30-microgram dose of the same drug.
The latest data reveal that these two patients experienced notable enhancements in retinal sensitivity, which is crucial for central vision and detailed visual perception.
Specifically, both patients had improved retinal sensitivity across the macula – the area of the retina responsible for sharp central vision – at the three-month follow-up.
For instance, one patient had a 1.1 dB increase in retinal sensitivity in the treated eye compared to baseline, while another had a 1.0 dB improvement. These improvements were observed to be better than changes seen in the untreated eyes of the same patients.
However, not all results were positive.
One patient, who carries mutations in two different genes associated with RP11, did not show any improvement and instead experienced disease progression in both eyes. Despite this, all three patients from this cohort have enrolled in a follow-up study to receive multiple doses of VP-001.
PYC is continuing to gather data from patients in both the Single Ascending Dose (SAD) and Multiple Ascending Dose (MAD) studies.
The results from these studies will help establish clinical proof of concept for VP-001.
The company anticipates further data later in the year and is preparing to launch a larger registrational trial in 2025.
Valuation and share price outlook
Canaccord’s current valuation for PYC remains unchanged based on these latest results, with a price target of $0.22.
This target reflects a risk-adjusted outlook for each of PYC’s indications.
“We view the data positively, noting that we like seeing a consistent, positive impact in both patients that improves over time,” said the note out of Canaccord.
“Success in Cohort 4 and the Part B extension study, as well as in the MAD, should be supportive of a registrational study, which management expects to commence in 2025.
“Pending more detail on the design and patient selection, the expected approval and commercialisation timeframe for the asset is 2028,” said Cannaccord.
“Fully de-risked, we see potential upside (for the stock price) to $1.20,” said Cannacord.
PYC Price at posting:
10.5¢ Sentiment: Buy Disclosure: Held
YC) with a target price of 22c (vs current price of 11c).
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