On Tuesday, Jones Trading maintained a Buy rating on Crinetics Pharmaceuticals (NASDAQ: NASDAQ:CRNX) and increased the price target to $56 from the previous $52 following the release of promising clinical trial results. The company announced successful topline data from its Phase 3 PATHFNDR-2 study, which evaluated paltusotine in patients with acromegaly, a hormonal disorder.
The trial data indicated that paltusotine met its primary endpoint, with a significant proportion of patients treated with the drug achieving targeted levels of IGF-1, a biomarker for acromegaly. Specifically, 56% of subjects on paltusotine reached IGF-1 levels at or below the upper limit of normal compared to only 5% in the placebo group, a result that was statistically significant.
Jones Trading highlighted that the trial's outcome surpasses the 30% response benchmark set by the company's management and aligns with the expectations of endocrinologists surveyed, who anticipated a 50%-70% response rate in medication-naive patients. The analyst pointed out that these results position paltusotine as a leading treatment option in the acromegaly space.
Furthermore, the analyst underscored the potential for Crinetics to impact the broader somatostatin receptor ligands (SRL) market, which is valued at approximately $6 billion. The positive clinical outcomes for paltusotine in acromegaly suggest that the drug could become highly competitive within this market segment.
In addition to the recent trial findings, the analyst's optimism is fueled by upcoming milestones for Crinetics. The company is expected to release Phase 2 data for congenital adrenal hyperplasia (CAH) in the second quarter of 2024 and has plans to initiate clinical studies for other pipeline assets in 2025. These developments have led to an increase in the probability of success for paltusotine in acromegaly from 80% to 95%, supporting the decision to raise the price target.
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