Top biotechnology stock pick from Guggenheim

Investing.com -- Guggenheim has named First Tracks Biotherapeutics TRAX as its top pick in the biotechnology sector following positive data from argenx that builds conviction ahead of TRAX’s fourth quarter 2026 celiac disease data readout.

The investment firm views recent Phase II celiac disease disclosure from argenx as de-risking CD122 biology in celiac disease and providing a positive readthrough for TRAX. Guggenheim’s analysis focuses on four key areas: effect size, study powering, gluten challenge parameters, and expectations for TRAX.

First Tracks Biotherapeutics (TRAX) - Top Pick

Guggenheim maintains First Tracks Biotherapeutics as its top pick following argenx’s positive Phase II celiac disease study results. The firm estimates argenx’s placebo-adjusted delta at approximately 0.2 to 0.3 based on the p-value of 0.0176. TRAX management expressed confidence that their approximately 30-patient study is adequately powered to show statistically significant results on the Vh:Cd endpoint, despite being smaller than argenx’s 126-patient study.

The company’s gluten challenge design uses 6 grams per day for two weeks, equivalent to approximately two slices of bread, which management believes is sufficient to render mucosal injury. Guggenheim presents two scenarios for TRAX: a base case with statistically significant Vh:Cd results could drive the stock to trade in the $2.5 billion to $3 billion range, while an upside scenario with statistically significant Vh:Cd plus greater than 0.3 treatment difference could push valuation above $3 billion.

The firm notes this would imply a superior anti-CD122 molecule compared to FB102 with fewer patients, with further differentiation from subcutaneous formulation. TRAX is expected to report topline results for its Phase Ib celiac disease program in fourth quarter 2026. The argenx readthrough represents the fourth successful celiac disease study across IL-15/CD122 programs, which Guggenheim believes meaningfully de-risks ANB033 ahead of the readout.

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