Oppenheimer on Corvus, Astria

 Corvus Pharmaceuticals (CRVS)

The first Oppenheimer pick we’re looking at is Corvus, a clinical-stage biopharmaceutical company focused on cancer treatment. The company’s approach is based on ITK inhibition, and its lead product candidate, CPI-818, also known as soquelitinib, acts as a selective ITK inhibitor with potential for treating both cancers and autoimmune/inflammatory diseases. The drug is an investigational, orally-administered small-molecule compound currently under clinical study for treating patients with T cell lymphoma.

Corvus has an active research pipeline featuring soquelitinib in three additional pre-clinical tracks. This drug candidate is wholly owned by Corvus and researched in-house. The firm also has two additional clinical-stage research tracks: ciforadenant and mupadolimab. These are under development in partnership agreements – ciforadenant with the KCRC and mupadolimab with Angel Pharmaceuticals, a Chinese partner.

In clinical updates, Corvus recently reported ongoing patient enrollment in the Phase 1/1b clinical trial of soquelitinib for relapsed TCL. Data released earlier this summer showed three complete responses and three partial responses out of 30 patients enrolled at the optimum dose of 200mg twice daily. The company believes that the current Phase 1/1b trial will provide the safety and efficacy data needed to inform the design of a potential Phase 3 registrational trial. The company plans to meet with the FDA within the next several weeks to discuss next steps.

On the partner-led clinical trials, the KCRC is enrolling patients in the Phase 2 portion of a Phase 1b/2 trial of ciforadenant. Up to 60 patients are expected to be enrolled, and initial data is expected to be available before year-end. The company’s Chinese partner, Angel, is enrolling patients in a Phase 1/1b trial of mupadolimab for the treatment of non-small cell lung cancer (NSCLC) and head and neck squamous cell cancers. This trial will test mupadolimab both as a monotherapy and as a combination therapy with pembrolizumab.

The clinical programs here are the key to Corvus, according to Oppenheimer analyst Jeff Jones. Jones says of the stock, “We view CRVS’s three clinical-stage programs as highly promising… Recent clinical updates for soquelitinib continue to support single agent activity in a biomarker defined subset of patients with r/r PTCL, with near-term (3Q23) FDA feedback anticipated to illuminate the path to a pivotal Phase 3 trial. Soquelitinib has the potential to be used in oncology and inflammatory/autoimmune diseases, with both soquelitinib and ciforadenant having the potential for activity in a broad range of tumor types, including the potential to enhance the activity of immune checkpoint inhibitors (ICIs).”

Based on the potential of Corvus’s clinical programs, and its $2.06 share price, Jones thinks that now is the time to get in on the action. The analyst rates CRVS an Outperform (i.e. Buy), while his $7 price target implies a substantial 240% upside for the year ahead. (To watch Jones’ track record, click here)

Looking at the consensus breakdown, most other analysts are on the same page. With 3 Buys and 1 Hold, the word on the Street is that CRVS is a Strong Buy. The $6.63 average price target puts the upside potential at ~222%.

Astria Therapeutics (ATXS)

The second Oppenheimer choice is Astria Therapeutics, a clinical-stage biopharma working on treatments for HAE (Hereditary Angioedema). This is a serious condition characterized by episodes of extreme swelling, usually in the face and limbs. The disease can also attack the abdomen or airway, is painful, can be disabling, and in severe cases, can even be life-threatening.

The company’s chief product is STAR-0215, potentially a best-in-class monoclonal antibody inhibitor of plasma kallikrein. The drug candidate is designed for long-term dosing every 3 to 6 months and acts as a prophylactic treatment, effectively preventing HAE attacks.

STAR-0215 has been successful in its clinical studies and shows high potential for further clinical trial successes. Astria last year released positive preliminary results from the Phase 1a trial in healthy subjects. Early this year, the company initiated its ALPHA-STAR proof-of-concept trial in patients with HAE. Initial results from this proof-of-concept study, including both single and multiple dose cohorts, are expected for release in the middle of next year.

Before that, the company expects to release final results from three single-dose, healthy subject cohorts during the fourth quarter of 2023. At the same time, the company will initiate a long-term open-label trial, ALPHA-SOLAR, to test STAR-0215’s long-term safety, tolerability, and efficacy in the treatment of HAE. All of these trials are supported by the FDA’s grant of Fast Track status to the drug candidate.

For Oppenheimer analyst Hartaj Singh, the active clinical program, with plenty of catalysts down the road, is the main feature for investors to consider.

“Given encouraging initial clinical results from a differentiated profile, we think that STAR-0215 could have promising PoC updates with a reliable MoA in 2024… By YE23, data on 6-month dosing cohorts should be available, per management. If the data is acceptable, we believe that significant upside exists for the share price… With cash of $203M at end of 2Q, we see a cash runway for ATXS to fund itself into 1H25. The potential best-in-class benefit/risk profile leads us to being long-term buyers,” Singh opined.

Quantifying his stance, Singh rates ATXS an Outperform (i.e. Buy) and gives the stock a $30 price target to suggest a robust 242% upside on the one-year horizon. (To watch Singh’s track record, click here)

Taking a macro view of Astria, we find that the stock has a Strong Buy consensus rating based on 5 unanimously positive analyst reviews. The average price target here is $26.20, representing ~200% upside potential from the current share price of $8.75. 

https://finance.yahoo.com/news/2-strong-buy-stocks-under-140134800.html