On Wednesday, Oppenheimer maintained its Outperform rating and $18.00 stock price target for Lumos Pharma (NASDAQ:LUMO), highlighting the potential for Lumos Pharma's oral LUM-201 to gain approval for pediatric growth hormone deficiency.
The firm's analyst pointed to the significance of the Phase 3 trial design, which is set to use a placebo as a comparator rather than injectable growth hormone (GH). This approach stems from the FDA's acknowledgment of LUM-201 as a novel growth promoter.
The analyst praised the Phase 3 trial design for its time and cost efficiencies compared to the traditional non-inferiority to GH design. Moreover, the design could reduce the risk of efficacy concerns, as it minimizes the confounding effects of age-related outliers and strong responses to recombinant human growth hormone (rhGH). The trial is expected to commence in the fourth quarter of 2024.
Lumos Pharma's financial position was also noted, with a recommendation to monitor the company's cash balance. Still, the analyst expressed optimism that the more favorable registration pathway for LUM-201 could lead to fruitful ex-US partnership discussions. Such partnerships are anticipated to provide non-dilutive funding and bolster capital markets interest.
The report from Oppenheimer comes after Lumos Pharma's first-quarter 2024 update, which included the strategic insights on the development and potential approval process for LUM-201. The company remains focused on advancing its treatment options for pediatric growth hormone deficiency, with the goal of offering an oral alternative to the current injectable therapies.
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