Roth Capital Affirms BioBlast Pharma (ORPN) at 'Buy'; Sees Trehalose Plan Heading in Right Direction
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Roth Capital affirms BioBlast Pharma (Nasdaq: ORPN) with a Buy rating and $15 price target following Q2 results released earlier Thursday.
Analyst Joseph Pantginis commented,
ORPN has made important strategic decisions in order to manage cash burn and focus on its lead clinical opportunity with trehalose. To this end, work has been postponed on the mitochondrial protein replacement and readthrough platforms. Regarding trehalose, the HOPEMD study has provided strong signals, in our belief, to lay out the path forward for the product in OPMD, while the SCA3 Phase II study moves forward as well. We believe the company is taking the right path forward with regard to trehalose in OPMD and will be initiating a Phase IIb study in 1Q17. This study will be a randomized, double-blind, placebo-controlled study targeting the enrollment of >70 patients at up to 15 sites in the U.S. and Canada. Beyond OPMD and SCA, trehalose has the opportunity to see market expansion as well.
Recall the company has been receiving inbound physician requests for studies in additional orphan indications. A rapid response to these requests could occur based on not having to recreate preclinical and toxicology studies as well as the manufacturing of trehalose already in place. Therefore any new indications beyond OPMD and SCA can move directly into the clinic. Regarding the shares, the stock has been volatile to the downside, which we attribute to lack of news flow post the HOPEMD study as well as the streamlining of operations. However, we believe the investment case is intact with regard to the trehalose opportunity.
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