Galectin Therapeutics (GALT) May Have Best Read-Through From Allergan's Tobira (TBRA) Deal - H.C. Wainwright's Arce
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While investors are flipping out about the premium Allergan (NYSE: AGN) paid for Tobira Therapeutics (NASDAQ: TBRA), H.C. Wainwright analyst Ed Arce told StreetInsider in an interview that the premium was exaggerated given the fact that the market misread Tobira's Phase 2b trial results in late July; sending the stock sharply lower instead of sharply higher after the primary endpoint was missed but CENTAUR did demonstrate a clinically and statistically significant improvement in fibrosis of at least one stage without worsening of NASH, one of two key secondary endpoints, after only one year of treatment.
While a number of NASH-related plays are seeing upside today amid the news, Arce views Galectin Therapeutics (NASDAQ: GALT) as having the best read-through given its anti-fibrosis NASH drug GR-MD-02. The Company expects to report the top line results from a Phase 2 clinical trial by the end of the month, Arce notes. While the trial is small, if it can show a meaningful degree of improvement it would be very positive for the stock and can put the under-the-radar name on the radar, he said. Arce has a Buy rating and $8 price target on GALT, which suggests 323% upside despite today 13% move higher in the stock.
Other NASH stocks covered by Arce include Galmed Pharmaceuticals (NASDAQ: GLMD), which is focusing on earlier stage NASH. He also likes and covers Conatus Pharmaceuticals (NASDAQ: CNAT), which focuses on the most severe NASH that has already progressed to psoriasis. Acre said there is little activity at this end of the severity spectrum.
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