H.C. Wainwright has maintained a Buy rating and a $14.00 price target for Rezolute (NASDAQ: NASDAQ:RZLT).
This follows the announcement on Monday that the U.S. Food and Drug Administration (FDA) has fully lifted the partial clinical holds on the drug RZ358, also known as ersodetug, which is being developed for the treatment of congenital hyperinsulinism (CHI).
The removal of the holds will allow Rezolute to proceed with clinical trials at all doses for patients older than 3 months, in line with the ongoing global study.
The previous restrictions, which were imposed due to concerns from preclinical toxicology studies in Sprague Dawley (SD) rats showing microvascular liver injury at potentially clinically relevant doses, limited patient age to those 12 years or older and placed dose level restrictions on RZ534. These restrictions had compelled Rezolute to conduct pivotal programs outside of the United States.
Rezolute's recent toxicology study, which included SD rats and brown Norway rats, revealed that no liver abnormalities were observed at the highest tested dose of 40 mg/kg in brown Norway rats, while SD rats showed liver abnormalities consistent with earlier studies. This finding suggested that the toxicity is specific to the SD rat strain, rather than indicative of a broader species-wide issue.
The FDA's clearance allows Rezolute to immediately begin enrolling patients in the Phase 3 sunRIZE study without additional delays. The study is currently enrolling patients across Europe, Asia, and the Middle East, with completion of patient enrollment anticipated by the end of 2024. With 1-2 sites in the U.S. identified for enrolling a small number of patients, the inclusion of U.S. participants is expected to strengthen the regulatory pathway in the country.
In other recent news, Rezolute has seen significant advancements in its clinical trials and has garnered positive attention from investment firms. The U.S. Food and Drug Administration (FDA) lifted the partial clinical holds on the company's pivotal trial for ersodetug, a treatment for congenital hyperinsulinism (cHI).
This allows Rezolute to enroll U.S. patients in the trial, with topline data expected in the second half of 2025. Furthermore, the FDA cleared Rezolute's phase 3 trial for RZ358, a therapy for hypoglycemia in patients with tumor hyperinsulinism, with patient enrollment in the U.S. expected to begin in the first half of 2025.
Investment firms BTIG, Craig-Hallum, and Jones Trading have all assigned a Buy rating to Rezolute's stock, with BTIG increasing its price target to $15.00, up from the previous $13.00. This adjustment comes after Rezolute announced positive results from a Phase 2 trial of RZ402, a potential treatment for diabetic macular edema, and finalized an additional stock offering that generated approximately $67 million in gross proceeds.
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