On Friday, Piper Sandler maintained its Overweight rating on shares of Edgewise Therapeutics (NASDAQ:EWTX), with a price target set at $51.00. The firm's analyst highlighted the potential for Edgewise's drug candidate, sevasemten, to gain accelerated approval, which could positively influence the stock's performance.
The optimism is based on upcoming Phase 2 CANYON trial data expected in December, which could show statistically significant results for the treatment of Becker muscular dystrophy (BMD).
The analyst pointed out that while market expectations are modest, even a statistical significance on creatine kinase (CK) levels combined with directional trends in North Star Ambulatory Assessment (NSAA) could support a case for an accelerated approval filing.
A "homerun" scenario would occur if sevasemten shows statistical significance across both CK levels and NSAA, potentially enabling Edgewise Therapeutics to file based on these data and drive further share gains.
Piper Sandler's analysis suggests that BMD offers an additional upside for the company's valuation, indicating that even if sevasemten does not meet the CK endpoint, the impact on the stock price could be minimal. This is because investor valuation is primarily focused on the company's hypertrophic cardiomyopathy (HCM) program, which is not the focus of the Phase 2 CANYON trial data.
The firm's increased confidence and the maintained price target follow positive data from Edgewise's EDG-7500 HCM program. The analyst believes that the potential for sevasemten to address BMD represents an unrecognized opportunity for investors, which could lead to positive stock movement if the upcoming trial results are favorable.
In other recent news, Edgewise Therapeutics has seen encouraging advancements in their drug development pipeline. RBC Capital Markets and Truist Securities have both increased their price targets for Edgewise, reflecting optimism about the company's '7500 drug candidate which showed promising first-in-human data and no safety concerns. The drug's potential to strengthen over time and differentiate from current Congenital Myotonic Dystrophy Inhibitors (CMIs) has been highlighted.
Edgewise reported positive results from Phase 1 and Phase 2 trials of its heart disease drug, EDG-7500, demonstrating significant reductions in left ventricular outflow tract gradients in patients with Hypertrophic Cardiomyopathy. A new 28-day trial has been initiated, with initial data expected in the first quarter of 2025.
Analyst firms such as Piper Sandler maintain an Overweight rating on Edgewise, citing upcoming milestones such as the Phase 1 trials for EDG-7500. The company also approved the 2024 Inducement Equity Incentive Plan, reserving 2 million shares of common stock for new equity awards, emphasizing its commitment to innovation and talent acquisition.
InvestingPro Insights
Edgewise Therapeutics (NASDAQ:EWTX) has shown remarkable market performance, with InvestingPro data revealing a staggering 337.81% price total return over the past year. This aligns with Piper Sandler's optimistic outlook on the company's potential, particularly regarding its drug candidate sevasemten.
The company's strong financial position is highlighted by an InvestingPro Tip indicating that EWTX holds more cash than debt on its balance sheet. This financial stability could be crucial as the company awaits key clinical trial results and potentially pursues accelerated approval for sevasemten.
Despite the positive market sentiment, it's important to note that EWTX is not currently profitable, with an adjusted operating income of -$136.17 million over the last twelve months. This aligns with another InvestingPro Tip suggesting that analysts do not anticipate the company to be profitable this year.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Edgewise Therapeutics, providing a deeper understanding of the company's financial health and market position.
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