In a Sept. 9 research note, ROTH Capital Partners analyst Yasmeen Rahimi reported that Eidos Therapeutics Inc. (EIDX:NASDAQ) agreed to give Alexion Pharmaceuticals exclusive rights in Japan to its clinical stage therapeutic AG10 for $50 million.
AG10 is a small molecule designed to potently stabilize transthyretin (TTR), thereby halting the progression of amyloidosis and other ATTR diseases.
Rahimi discussed Eidos' rationale behind the deal and "why it makes sense now."
One, the transaction provides an easier way for Eidos to enter the Japanese market. By itself, Eidos would have had to conduct another pivotal study just for that.
Two, the deal is a "tack-on development that adds more to the Eidos coffers without changing existing AG10 commercial strategy," Rahimi noted.
Three, the arrangement also serves as an initial instance of Eidos being vigorously vetted by big pharma "and emerging as an even shinier, validated diamond for others to see," wrote Rahimi.
About the deal in general, Rahimi commented, "Taking a bird's eye view of the ATTR-cardiomyopathy landscape, we view this as a significantly hot indicator of the number of strategics knocking on Eidos' door for a space at the AG10 table."
Rahimi indicated that the next two months for the San Francisco-headquartered biopharma look "rosy" with potential significant upside regardless of whether its acquisition by BridgeBio Pharma goes through. Closing would be a "significant win" for Eidos, "completing a fourfold increase in share price from about $10 lows in October 2018," the analyst added. However, not closing would not hamper the working relationship between the two firms.
Another upcoming catalyst for Eidos is its scheduled presentation at the 2019 American Heart Association Scientific Sessions meeting in November, during which the biopharma will review the long-term safety and pharmacokinetic/pharmacodynamic results from its Phase 2 open-label extension study.
ROTH has a Buy rating and a $51 per share price target on Eidos, whose stock is currently trading at around $43.43 per share.[NLINSERT]
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Disclosures from ROTH Capital Partners, Eidos Therapeutics Inc., Flash Note, September 9, 2019
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
ROTH makes a market in shares of Eidos Therapeutics, Inc. and as such, buys and sells from customers on a principal basis.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.