Aegis Capital Positive on Opexa Therapeutics (OPXA) Post-Q2; Focus Remains on Abili-T Data
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Aegis Capital affirms Opexa Therapeutics (Nasdaq: OPXA) witha Buy rating and $11 price target following Q2 results from the company.
Analyst Robert LeBoyer commented on Friday:
Avidly Awaiting Alili-T Trial Results Opexa Therapeutics confirmed that it is on schedule to report data from the Abili-T trial early in the fourth quarter, consistent with previous expectations. The Abili-T trial is testing Tcelna in secondary progressive multiple sclerosis (SPMS). The endpoints include reducing brain atrophy and disease progression, which we believe are valuable clinical endpoints.
Tcelna is an autologous cellular based therapy in which myelin reactive Tcells (MRTC) are isolated from patient blood samples. These cells are processed, then mixed with a sample of the patient's blood. This causes other immune cells to recognize the MTRCs as harmful, stimulating an immune response to destroy them. When Tcelna is administered to the patient, the immune response should eliminate the autoreactive cells that cause MS damage.
In our view, Opexa is not a financially driven company, making the Abili-T trial the most important milestone for the company. There are several drugs available for relapsing-remitting MS with total sales in the $19 billion range. The disease still progresses over time to the secondary progressive form of MS. If the Abili-T trial is successful, it would be a ground-braking new product for secondary progressive MS.
We value the stock based on expectations of positive Phase IIb results, followed by a Phase III trial running during 2017 to mid 2019. According to Opexa's option and license agreement with Merck Serono, exercise of the option would result in the 1H17, with a $25 million payment to Opexafollowed by additional milestones of up to $220 million. Royalties would range from 8% to 15% based on sales levels.
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