BofA Securities has shifted its stance on Amylyx Pharmaceuticals Inc. (NASDAQ: AMLX), lifting the stock from Neutral to Buy and increasing its price target to $10.00 from the previous $4.20.
The upgrade was influenced by the promising outlook for avexitide, Amylyx's drug candidate aimed at regulating blood sugar levels.
The analyst from BofA Securities remarked that the decision to upgrade Amylyx and raise the price objective is based on the potential of avexitide, which Amylyx acquired from Eiger Pharma earlier this summer. The drug has already demonstrated positive results in phase 2 trials.
Avexitide is poised to potentially become the first approved treatment for post-bariatric hypoglycemia (PBH), a condition that causes dangerously low blood sugar levels in patients following bariatric surgery.
Unlike GLP-1 agonists, which are commonly used for weight loss and blood sugar reduction, avexitide functions as a GLP-1 antagonist. This means it works to inhibit the overproduction of insulin after meals, thereby preventing hypoglycemic episodes. The analyst highlighted that despite the prevalence of bariatric surgeries since the early 2000s, with an estimated 2.6 million procedures from 2011 to 2022, awareness of PBH among endocrinologists only began to rise around 2010, and many primary care physicians today are still not fully aware of the condition.
The report also addressed the current management of PBH, noting that despite dietary management and off-label medication use, more than 50,000 patients are still at high risk for severe hypoglycemic events.
While the number of bariatric surgeries is expected to decrease by 15% over the next decade, the number of patients with PBH is predicted to grow due to the lifelong nature of the condition.
In other recent news, Amylyx Pharmaceuticals reported encouraging results from the Phase 2 HELIOS trial. The trial data indicated improvements in pancreatic function among patients with Wolfram syndrome. The study demonstrated consistent enhancement in C-peptide levels and HbA1c levels, suggesting a slowing of disease progression in these patients. Furthermore, the trial showed an improvement in visual acuity, potentially stabilizing and slowing optic nerve degeneration, a crucial need in the patient community.
Amylyx's Q2 2024 financial results revealed a net loss of $72.7 million. Despite this, the company maintains a robust cash position of $309.8 million, expected to fund operations until 2026. Amylyx also announced the acquisition of Avexitide, an FDA-approved treatment for hyperinsulinemic hypoglycemia, with plans to initiate Phase 3 development in the upcoming year.
H.C. Wainwright and Leerink Partners have both shared their analysis on the company's performance. H.C. Wainwright maintained its Buy rating on Amylyx shares, while Leerink Partners maintained its Market Perform rating. Both firms noted the positive results from the HELIOS trial, but Leerink expressed the need for further evidence on the long-term effects of AMX0035, Amylyx's investigational treatment.
InvestingPro Insights
As Amylyx Pharmaceuticals Inc. (NASDAQ:AMLX) receives an upgraded rating from BofA Securities, InvestingPro data provides additional context to the company's financial position and market performance. Despite a challenging year-to-date performance, with a price total return of -69.23%, recent market sentiment appears to be shifting positively. The stock has shown impressive short-term gains, with a 55.67% price total return over the past month and a striking 131.12% return over the last three months.
InvestingPro Tips highlight that Amylyx's revenue growth has been robust, with a 55.71% increase over the last twelve months as of Q2 2024. This growth aligns with the optimistic outlook on avexitide's potential market impact. However, it's important to note that the company is currently operating at a loss, with an adjusted operating income of -$177.76 million for the same period.
For investors seeking a deeper understanding of Amylyx's financial health and growth prospects, InvestingPro offers 14 additional tips that could provide valuable insights into the company's future trajectory.
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