Biotechs on a tear have been a theme in 2020. Most have taken off on the hope of solving the COVID-19 vaccine or treatment conundrum. While not all have shared in the COVID related bounty, others have soared based on the premise of bringing to market other necessary solutions.
Which brings us to Momenta Pharmaceuticals (MNTA). Year-to-date shares are up by 69%, as investors have hopes for the immune disease focused company’s pipeline.
So does Stifel’s Derek Archila. That said, the analyst believes a different company’s recent strong trial data bodes well for Momenta.
On Monday, Argenx SE announced positive results from its Phase 3 study for efgartigimod in myasthenia gravis (MG), an incurable chronic neuromuscular disease. 67.7% of those suffering from the condition achieved improvements in the daily lives after being treated with efgartigimod.
Why is this good news for Momenta? Because the biotech has its own MG treatment in the pipeline, nipocalimab, currently in a phase 2 trial.
Archila said, “We believe the results further validate the anti-FcRn mechanism in MG and increase the probability that nipocalimab will demonstrate positive results in its Phase 2 study expected to read out in the coming weeks.”
Furthermore, Archila argues that Momenta’s offering might have the edge as of all the anti-FcRn therapies in progress, nipocalimab has exhibited the largest reduction in IgG which could “enable it to potentially demonstrate deeper and/or more durable responses on MG-ADL which could lead to better durability/dosing flexibility than efgartigimod.”
Archila’s gives a 55% probability of success for nipocalimab in MG and argues its possible use cases are currently under the Street’s radar.
“We believe nipocalimab’s broad potential across multiple IgG-mediated autoimmune diseases remains underappreciated by investors, and we think the risk/reward ahead of data is highly favorable (+85% upside in bull case/-25% downside in our bear case from current levels),” the analyst concluded.
Unsurprisingly, Archila maintains a Buy on MNTA shares, though has no price target in mind. (To watch Archila’s track record, click here)
Over the past 3 months, 3 other analysts have chipped in with a view on the biotech’s prospects -2 saying Buy while the other recommends a Hold. These analysts expect about 21% addition to the current share price, should the $38 average price target be met over the next 12 months. (To watch Archila’s track record, click here)
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