Zogenix (ZGNX): Stifel Positive On Fenfluramine First Data Points After NDR

Stifel analyst, Annibel Samimy, reiterated her Buy rating on shares of Zogenix, Inc. (NASDAQ: ZGNX) noting that the company is approaching its first data release from its pivotal program of ZX008 (low-dose fenfluramine) for the treatment of Dravet Syndrome (DS), an intractable form of early-onset epilepsy.

Designed on the back of “dramatic” results from long-term open label studies in a small patient populations, Study 1 (1501/1502) will be the first large, well-controlled trial of fenfluramine. If successful and competitive relative to other development programs, fenfluramine has the potential to be game-changing for a population that has had inadequate treatments to date. Phase 3 results are expected in 3Q17, with its second pivotal study (1504) emerging 1Q18. If successful, Zogenix plans to file its NDA in 1H18, and with Fast Track Designation, we expect market availability in early-2019.

Last week the analyst traveled with management noting several reasons they are optimistic even though data to date has been from small cohorts of patients in open-label studies. Several factors give management comfort that fenfluramine has activity, and the trial is designed to show clinical and significant separation of placebo:

1) the dramatic and consistent reductions in seizures are not observed in the natural course of disease, and patients enrolled have been uncontrolled on polypharmacy (3+ drugs)

2) the placebo rate has been well established in several recent DS trials at a range of 15-20%, thus observed reductions were highly meaningful.

3) the study is 90% powered to reach statistical significance at a 40% variance, but has sufficient cushion to achieve significance as low as 25-30%

4) recent results in controlled trials for DS have shown remarkable consistency with prior open-label
results

No change to the price target of $26.

For an analyst ratings summary and ratings history on Zogenix, Inc. click here. For more ratings news on Zogenix, Inc. click here.

Shares of Zogenix, Inc. closed at $15.00 yesterday.

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