NeuBase Therapeutics Inc. (NBSE:NASDAQ) just gave a corporate update, and based on the information provided, Oppenheimer & Co. lowered its target price on the biopharma to $15 per share from $17, analyst Hartaj Singh reported in an August 22, 2022 research note.
NeuBase is trading now at around $0.73 per share, which is "relatively cheap," as described by Singh. Also, the large difference between the current and target prices implies the company offers investors significant potential return.
Despite the IND delay, Singh said, Oppenheimer remains bullish on NeuBase's approach to therapeutic development and rates the company Outperform.
Singh explained that a key factor contributing to Oppenheimer's price target decrease is NeuBase's roughly half-year delay in submitting its investigational new drug (IND) application for NT-0200, its therapeutic candidate for myotonic dystrophy type 1 (DM1) and lead clinical program. The firm is developing precision genetic medicines for rare monogenic diseases with no approved therapies.
"In our view, this delay might later pay dividends to investors with NeuBase's peptic nucleic acid (PNA) drugs to strengthen application of the PATrOL platform," Singh commented.
Now, NeuBase is expected to file the IND for NT-0200 in DM1 in mid-2023. The reason for the additional time is so the company can conduct longer, three-month-long, preclinical animal safety studies beforehand, given the drug takes about four weeks after administration to be absent from the system.
"The delay (about six months) in the IND for DM1 is somewhat disheartening, but in our view, this delay might later pay dividends to investors with NeuBase's peptic nucleic acid (PNA) drugs to strengthen application of the PATrOL platform," Singh commented. (PATrOL is the acronym for peptide-nucleic acid antisense oligonucleotide base.)
Singh relayed that NeuBase and Inserm, the French national institute of health and medical research, recently launched an animal model study of NT-0231.F to measure central nervous system and heart pharmacology and, in turn, calculate the human equivalent dose or doses of the therapeutic.
"While the team needs additional safety work, we continue to believe the DM1 program has potential into the clinic," Singh wrote. "It is clear that NeuBase has a broadly biodistributed solution, yet [it] is specific for major tissues affected by DM1."
The extra preclinical efforts NeuBase makes on DM1 now should benefit the company's other PNA drug programs in the future, management noted, and Singh agreed.
He wrote, "We think this belief accurate and that it could reassure some investors. We expect this work to be of benefit down the road to — for example — the potential Huntington's disease candidate."
To advance its Huntington's program, NeuBase needs the complete pharmacology data analysis, for which it is waiting, to then nominate a therapeutic candidate. However, Singh anticipates the company will release further preclinical results at conferences later this year.
As for the biopharma's third clinical program, KRAS cancers, indicated Singh, NeuBase has temporarily deprioritized it but plans to seek a partner to advance it.
At the end of Q3 FY22, NeuBase had about $29.8 million in cash and cash equivalents, Singh reported.
Despite the IND delay, he said, Oppenheimer remains bullish on NeuBase's approach to therapeutic development and rates the company Outperform.
Singh added that "NeuBase's ability to speed its lead molecules NT0200 (myotonic dystrophy and NT0100 (Huntington's disease) through preclinical drug development over the next 12–24 months will be value-creating events for investors."
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