Infinity Pharmaceutical (INFI) RA Outcome As Expected, Says RBC

RBC Capital maintained an Outperform rating on Infinity Pharmaceutical (NASDAQ: INFI) with a price target of $20. Earlier Infinity announced that its phase 2 ASPIRA study in RA did not meet its primary endpoint. Analyst Michael J. Yee said the outcome wasn't as surprise.

"As expected, Phase II study in rheumatoid arthritis missed the primary endpoint, tad disappointing as it eliminates a potential upside opportunity. With these results, INFI confirmed that they won't pursue RA with their PI3k candidates (including follow-on IPI-443) given the risk/reward and resources required. However, the primary thesis on INFI remains its opportunity in CLL and iNHL, which are in pivotal trials and was recently partnered with ABBV," said Yee.

"Key focus in the next year will be on what kind of combination approach (with btk or ABBV's ABT-199?) it implements as well as potential for data from the two pivotal studies before YE. Valuation remains inexpensive, in our view, although it may take some time for value creation until data in H2:15," he continued.

Yee added, "Given the pre-clinical evidence of PI3K-delta/gamma's role in immune cell activation, IPI-145 was evaluated in asthma and RA. However, in Oct '14, asthma POC study showed only trends at highest dose (25mg) and RA expectations were low given low dose (1mg, 5mg) and whether that involves enough PI3kgamma. Bar on tolerability for RA is high and thus why we think it makes higher doses unfeasible and therefore the risk/reward given resources unfavorable in INFI's point of view. Based on our communication, INFI is still analyzing the data from the asthma study and evaluating whether its follow-on IPI-443 should be explored there given resources. Our expectation on inflam opty remain low and agree primary focus should be on the blood cancer indications."

For an analyst ratings summary and ratings history on Infinity Pharmaceutical click here. For more ratings news on Infinity Pharmaceutical click here.

Shares of Infinity Pharmaceutical closed at $16.33 yesterday.

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