On Wednesday, EF Hutton initiated coverage of Hoth Therapeutics (NASDAQ: NASDAQ:HOTH), granting the biopharmaceutical company a "Buy" rating with a $5.00 price target. The firm's analysis hinges on the potential of HT-001 Topical Gel, currently in Phase 2a clinical study for the treatment of EGFR-positive rash in cancer patients.
The firm's positive outlook is based on the topical gel's development along a 505(b)(2) pathway, with an anticipated commercialization by 2029. EF Hutton's ten-year model projects the market for HT-001 targeting 12.5% of non-small cell lung cancers (NSCLCs) that are EGFR positive, 50% of KRAS wild-type colorectal cancers, and 70% of head and neck cancers, creating an annual patient pool of 145,000.
The model assumes an annual price of $30,000 for the treatment, in line with existing therapeutic agents for similar indications.
EF Hutton applies a 30% Probability of Success (POS) to the model, considering the early stage of the clinical study. The firm's valuation does not include pre-clinical compounds, such as BioLexa for atopic dermatitis, which is in phase 1b. HT-001 has shown promise in animal models, with a 40-50% improvement in inhibitor-induced cutaneous toxicity, and is undergoing a randomized, placebo-controlled, parallel Phase 2a dose-ranging study to evaluate its efficacy, safety, and tolerability.
The company's intellectual property portfolio for HT-001 includes six U.S. patents, one pending U.S. patent application, licenses to three patents in Europe and Australia, and five pending patent applications in other jurisdictions. EF Hutton's valuation also factors in a 30% discount rate and the possibility of additional capital raises when determining the final share count.
The firm's valuation methods include Free Cash Flow to the Firm (FCFF), discounted EPS (dEPS), and sum-of-the-parts (SOP) models. These are equal-weighted, averaged, and rounded to derive the 12-month price target.
In other recent news, Hoth Therapeutics has made significant strides in various areas. The company has advanced its HT-KIT cancer therapeutic study in partnership with Aronnax, Inc., focusing on determining the maximum-tolerated dose for future clinical trials. The treatment has shown promise in reducing KIT expression in certain cancer cells and received Orphan Drug Designation from the FDA.
In addition, Hoth Therapeutics' shareholders approved key proposals, including the re-election of board members and the ratification of Withum Smith+Brown, PC as the independent registered public accounting firm for fiscal year 2024. They also approved an amendment to increase the number of shares reserved for issuance under the company's Equity Incentive Plan.
The company has also made progress in Alzheimer's treatment through a partnership with LTS Therapy Systems, developing an oral film treatment, HT-ALZ, showing potential cognitive benefits in preclinical results. EF Hutton maintained its Buy rating on Hoth Therapeutics following these positive results.
Hoth Therapeutics expanded its Phase 2a clinical trial for HT-001, a treatment for skin toxicities caused by cancer medications, to include three new sites. Furthermore, the company amended its bylaws to clarify shareholder voting rights and modified terms for certain outstanding warrants, potentially raising about $4.2 million in gross proceeds, with H.C. Wainwright & Co. as the exclusive placement agent.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.