On Thursday, Guggenheim adjusted its outlook on shares of AnaptysBio (NASDAQ: NASDAQ:ANAB), reducing the stock's price target to $36 from $90, while keeping a Buy rating. The adjustment follows the company's announcement that ANB032, its BTLA agonist, failed to meet primary or secondary endpoints in a Phase IIb atopic dermatitis (AD) study involving 201 participants.
AnaptysBio has decided to halt all further investment in ANB032, a move considered judicious by the firm. The news has contributed to the stock's 34% decline over the past week, with shares currently trading at $15.51. According to InvestingPro analysis, the stock appears undervalued at current levels, with 13 additional ProTips available to subscribers.
The patient group in the trial was predominantly in the moderate-to-severe category, with a baseline EASI score of 27.3. Despite the drug's response rates nearing the minimum target product profile, the unexpected high placebo rates, especially in the U.S., influenced the trial's outcome.
However, the management highlighted the drug's benign tolerability and safety profile, noting that adverse event rates were comparable to placebo. With a market capitalization of $472 million and a strong current ratio of 10.23, InvestingPro data shows the company maintains solid liquidity despite operating challenges.
Looking ahead, AnaptysBio's next significant event is the anticipated Phase II results for rosnilimab, a PD-1 agonist being tested for rheumatoid arthritis, expected in February 2025. The trial has completed enrollment with 425 participants. Guggenheim remains optimistic about the potential of targeting inhibitory pathways to treat autoimmune diseases, despite recent challenges in the checkpoint agonism field.
Investors have been cautious about the BTLA-agonism pathway, and Guggenheim suggests that they are awaiting the results from the PD-1 agonist study before placing value on AnaptysBio's pipeline.
The pipeline also includes other programs such as ANB033, an anti-CD122 antagonist, and ANB101, a BDCA2 modulator. Following the discontinuation of ANB032, Guggenheim has removed it from their model, resulting in the new price target of $36.
In other recent news, AnaptysBio reported a failed Phase 2B trial, however, the company maintains its cash reserves. Despite not reaching its primary endpoint, AnaptysBio's ANB032 did not raise any safety concerns.
In financial developments, AnaptysBio reported a third-quarter net loss of $32.9 million, yet saw a significant increase in collaboration revenue, which rose to $30 million. Analysts from BTIG adjusted their stance on AnaptysBio shares from Buy to Neutral.
Truist Securities maintained their Hold rating on AnaptysBio with a steady price target of $30.00, while Guggenheim reiterated its Buy rating, expressing confidence in the company's BTLA agonist, ANB032, in treating autoimmune diseases.
H.C. Wainwright reduced its price target for AnaptysBio due to an increase in operating expenses and a third-quarter operating loss of $22.8 million. In clinical developments, AnaptysBio's ANB032 is advancing to a Phase 2b ARISE-AD trial, and rosnilimab is proceeding to a Phase 2b RENOIR RA trial.
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