Updates from ASH Reinforce Analyst's Big Price Target Potential
Research Report


Andrew Fein, an analyst with H.C. Wainwright & Co., discussed the implications of this biopharmaceutical's recently announced data, which support his "bullish" outlook for the firm's candidate in chronic graft versus host disease.

In a Dec. 15 research note, Fein reported that he "remains bullish" on Kadmon Holdings Inc.'s (KDMN:NYSE) therapeutic, KD025, in chronic graft versus host disease (cGVHD), after updated data were presented at the American Society of Hematology's recent annual meeting.

These results, from an additional cohort of 40 patients receiving an "optimal dose" of KD025, a small molecule inhibitor of ROCK2, revealed three major findings, suggested Fein.

First, the data confirmed that the clinical benefits of KD025 in cGVHD were "comparable" to those of ibrutinib, which the FDA approved in August for adults with the condition, Fein described. Specifically, the overall response rate with KD025 was 64%, whereas that with ibrutinib was 67%.

Second, the data revealed the benefit and safety of KD025 in cGVHD to be superior to those of ibrutinib, Fein indicated. In the trial of KD025, patients' infection risk did not increase, no patients reported fungal infections and no patients stopped the therapy due to adverse effects. The same were not true in the ibrutinib study: 69% of patients had infectious complications, and 33% of patients discontinued treatment due to adverse effects after a median 1.8 months.

"Therefore, in our opinion, a very similar overall response rate but with a significantly improved safety profile should provide an advantage toward KD025 in the eyes of both providers and patients," the analyst concluded.

Third, the data showed KD025 has clinical benefits "in corticosteroid and tacrolimus dose reductions and robust responses across organs," Fein wrote. "If approved, in our view, the real world setting could result in a greater level of compliance for KD025, and this could translate to greater penetration and maintenance."

Kadmon Holdings' management team plans further conversations with the FDA in H1/18 regarding the path to regulatory approval of KD025 in cGVHD, for which, Fein said, "the ibrutinib program provided a reachable development and regulatory goal posts."

Fein also noted that the recently reported KD025 results in cGVHD may have positive implications for the use of the therapeutic in idiopathic pulmonary fibrosis (IPF). Such a trial is now underway. The aim of trials in IPF is typically to prevent disease progression over time, with respiratory function as the likely primary endpoint.

To that end, the analyst explained, KD025 "was shown to improve lung function by decreasing collagen deposition in a multiorgan-system cGVHD model with bronchiolitis obliterans syndrome. Therefore, in our view, KD025 has potential to prevent fibrosis, and slow the decline of lung function." Also, KD025 may "induce the regression of already established fibrosis and thus improve overall lung function."

The initial data readout of Kadmon's Phase 2 IPF trial, anticipated in the next few months, "may offer a near-term inflection point," Fein said.

H.C. Wainwright has a Buy rating and a $25 per share price target on Kadmon, whose stock is currently trading at around $3.58 per share.

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