XenoPort's (XNPT) XP-829 Efficacy 'Looks Good' - RBC Capital

RBC Capital maintained an Outperform rating on XenoPort (NASDAQ: XNPT) with a price target of $10. Earlier XenoPort announced positive preliminary top-line results from its Phase 2 clinical trial of XP23829 as a potential treatment for moderate-to-severe chronic plaque-type psoriasis. Analyst Michael J. Yee said efficacy looks good and views news as a positive.

"Xenoport announced positive Phase IIB psoriasis data for XP-829 showing statistically significant PASI reductions of up to -50.7% in the highest dose (BID) arm vs. -25% in placebo (p<0.001). Notably, the 400mg QD (once daily) arm was also a similar -48% reduction in PASI (p=0.001). Side effects of GI appear in high level similar to BIIB Tecfidera and not yet a differentiated part of this drug per se, reporting diarrhea 22-40% here, which is somewhat similar to Tecfidera," said Yee.

"This is positive for Xenoport because: (1) supports the proof of concept that XP-829 is an active MMF prodrug molecule that appears to be at least similar to Biogen's DMF which is a $4B+ peak sales drug in MS alone; (2) XP-829 has potential to move to Phase III in psoriasis which is a blockbuster indication and where BIIB has no plans to develop here due to its pricing for MS; (3) XNPT has a low $400M market cap so this is very interesting for XNPT to see how it proceeds as a go-it-alone and keeps all rights to a Phase III potential psoriasis drug, or potentially monetize (sell) to a big pharma/spec pharma company, etc," continued the analyst

Yee added, "There is no doubt the drug appears to be potent and efficacious; the question that will also be discussed not surprisingly is one of tolerability/safety and for bulls and bears, the risk/benefit in psoriasis. However, Tefidera is not approved/developed for psoriasis so this could be essentially one of the rare oral potential options vs. CELG Otezla which has lower efficacy but better tolerability. Specifically, (1) no subjects experienced Grade 3 or Grade 4 lymphopenia (which does look better than Tecfidera label of 5% Grade 3). Less than 5% of subjects in any XP23829 treatment group reached Grade 2 lymphopenia and less than 15% reached Grade 1 at any visit. Lymphocyte levels in all subjects experiencing lymphopenia returned to within normal limits after treatment. (2) There was one SAE of colitis (very bad diarrhea/GI) and one case of acute cholecystitis; both patients recovered."

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

Shares of XenoPort closed at $6.73 yesterday.

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