H.C. Wainwright analyst Emily Bodnar downgraded Acelyrin Inc (NASDAQ: SLRN) from Buy to Neutral with a price target of $6.00.

The analyst comments "Second Phase 3 study of izokibep in HS meets primary endpoint though efficacy does not support internally advancing. Yesterday after market close, Acelyrin announced 2Q24 results and also announced a pipeline re-prioritization following topline results from the second Phase 3 study of izokibep for treatment of hidradenitis suppurativa (HS). As a reminder, the HS Phase 3 topline data were expected in 3Q24 and this was the second Phase 3 trial for treatment of HS which enrolled 258 patients. The trial evaluated izokibep 160 mg QW vs placebo (1:1 randomization) and the primary endpoint of the study was HiSCR75 at Week 12. The previous Phase 2b/3 HS readout in Sept 2023 did not meet its primary endpoint of HiSCR75. However, despite the negative topline, the data showed that high placebo rates and high discontinuation rates may have impacted HiSCR responses in the study. The second Phase 3 study met the primary endpoint of HiSCR75 at Week 12 with 33% of patients achieving HiSCR75 on izokibep vs 21% in placebo (12% delta) (p=0.0294). In addition, a statistically significant improvement in HiSCR90 and HiSCR100 was also observed with 25% of patients achieving HiSCR90 vs 9% on placebo (16% delta) and 22% of patients achieving HiSCR100 vs 8% on placebo (14% delta). The company also saw responses deepen through Week 16 with HiSCR75 increasing to 40% vs placebo of 20% (20% delta). Despite the positive topline results, we do not view the data as competitive with the evolving landscape in HS given higher HiSCR75 responses noted for sonelokimab in Phase 2 and bimekizumab in Phase 2 and 3 studies. As a result, we are not surprised with the company choosing to not advance izokibep further internally. In addition, the company is also not advancing izokibep for PsA, which similarly had a positive Phase 2b/3 study, though was also not a home-run on the efficacy front. As such, we have removed all izokibep sales from our model."

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Shares of Acelyrin Inc closed at $4.76 yesterday.