TD Cowen has maintained a Buy rating on Acelyrin Inc (NASDAQ: SLRN), expressing optimism about the company's forthcoming updates and strategic decisions. The endorsement comes as the biotech firm prepares to provide a Phase II update for its investigational drug, loni, in Thyroid Eye Disease (TED) before commencing pivotal trials in the first quarter of 2025.
The analyst from TD Cowen highlighted the substantial potential of Acelyrin's drug candidate izokibep (izo) for treating uveitis, a form of eye inflammation. According to the analyst, the drug's rationale for efficacy in this indication is robust, and the market opportunity is significant, particularly given the potential for orphan drug pricing, which can offer financial incentives for drug development in rare diseases.
Furthermore, the analyst applauded Acelyrin's efforts to reduce expenses, a move that is expected to extend the company's cash runway by an additional one to two years. This strategic financial management is seen as a critical step for the longevity and success of the company's development programs.
Acelyrin has seen a shift in its strategic focus, with Citi and Piper Sandler revising their stock price targets for the company. This follows Acelyrin's decision to prioritize the development of lonigutamab for thyroid eye disease and deprioritize other projects, including izokibep, despite its successful Phase 3 trial. The strategic shift is projected to extend the company's cash runway until mid-2027.
Additionally, Acelyrin reported a net loss of $85.7 million for Q2 2024. The company also announced a 33% workforce reduction in line with its new strategic direction. H.C. Wainwright downgraded Acelyrin's stock from Buy to Neutral, reflecting the company's decision to halt internal development of izokibep.
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