BELLUS Health Inc. (BLU) PT Raised to $18 at BTIG; 'Best-case Scenario Reached'

BTIG analyst Justin Zelin raised the price target on BELLUS Health Inc. (NASDAQ: BLU) to $18.00 (from $13.00) while maintaining a Buy rating.

The analyst commented, "This morning, Bellus announced topline data evaluating P2X3 antagonist BLU-5937 in the Phase 2b SOOTHE trial (for RCC) and Phase 2 BLUEPRINT trial (for AD-related pruritus), highlighting an impressive 34.4% (p = 0.003) pbo-adjusted 24h cough frequency reduction at 50mg with an taste AE rate of 6.5%, and a 34.2% (p=0.005) pbo-adjusted change at 200mg with a taste AE rate of 4.8%, clearly differentiating BLU-5937 as the best-in-class P2X3 antagonist. We note that data from SOOTHE achieved our best-case scenario in our data preview analysis of hitting ≥30% pbo-adjusted cough reduction with ≤10% taste AE rates (see note here), positioning BLU-5937 as a likely treatment of choice amongst the P2X3 class with the highest efficacy and lowest adverse event rates of the class. Notably, even the lowest 12.5mg dose demonstrated a positively trending 21.1% pbo-adjusted 24h cough frequency reduction (p=0.098) and taste AE rate of 4.8% with a clear dose response from 12.5mg to 50 and 200mg doses. Overall, there were no cases of partial or complete taste loss, with only 3 (4.8%) discontinuations at the highest 200mg dose deemed as possibly related to treatment. Bellus is expected to hold an end of phase 2 meeting with the FDA in 2Q22E to discuss Phase 3 development scheduled to begin in 2H22E, and we expect the 50mg dose will be advanced given equivalent efficacy and comparable safety to 200mg. On the Phase 2a BLUEPRINT trial in AD-related pruritus, Bellus did not hit stat sig for the primary endpoint, but noted safety was consistent with prior data with no observed TE-SAEs, and will not continue development of BLU-5937 in pruritic conditions. We did not include the pruritus in our modeled valuation, and see the discontinuation of the pruritus program as an overhang lifting as Bellus focuses their attention on cough. Bellus will continue to evaluate ‘5937 in additional cough indications, which we believe has a higher probability-of-success and offers rational bolt-on indications for commercialization. We have increased our modeled probability-of-success from 35% to 40% and correspondingly increase our PT from $13 to $18 and reiterate our Buy rating on Bellus."

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