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GTX (GTXI) Soars After Analyst Highlights Prostate Cancer Drug, Upgrades to Buy

April 13, 2011 12:30 PM EDT Send to a Friend
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Price: $0.98 +3.16%

Rating Summary:
    1 Buy, 5 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 24 | Down: 14 | New: 52
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The research call of the day could easily go to Citi on GTX Inc. (Nasdaq: GTXI).

Shares of the biotech stock are up 30 percent Wednesday after Citi raised its rating from Hold to Buy and set an aggressive $8 price target.

Citi analyst Lucy Lu said risk/reward on the stock is compelling and investors are overlooking pipeline prostate cancer drug Capesaris.

"While the company is known for developing toremifene which has been discontinued, we believe their pipeline drug Capesaris for hormone sensitive prostate cancer represents a potential new method to castrate prostate cancer patients and currently overlooked by investors," Lu said.

Lu believes Phase 2b data on Capesaris, due later this year, "could become a value creating event for the stock."

Lu explains Capesaris, an estrogen receptor alpha agonist, is a novel form of androgen deprivation therapy (ADT) for prostate cancer. The drug has demonstrated efficacy in a Ph I/II study in healthy young males. A mid-year Phase IIb trial will enroll 156 patients with advanced prostate cancer randomized 1:1:1, two doses of Capesaris (1000 mg and 1500 mg) vs inj. Lupron. The primary endpoint will include proportion of patients that achieve castrate levels of total testosterone levels (<50 ng/dL) by 60 days, followed by additional 10 mos of efficacy and safety data.

While injectable GnRH agents are well-entrenched form of androgen deprivation therapy, side effects have been the major setback. However, "based on its mechanism of action, Capesaris may be able to achieve castration without some of these side effects," Lu notes. "In addition, it is a pill which may be preferred by some patients and provides a theoretical advantage by decreasing free testosterone level more than current agents."

Lu sees peak sales potential of approximately $600M in the U.S.




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