Goldman Sachs has reiterated its Buy rating on shares of Avidity Biosciences (NASDAQ: RNA) with a consistent price target of $59.00.
The firm's optimism remains after the U.S. Food and Drug Administration (FDA) lifted a partial clinical hold on the development of Avidity's therapeutic candidate, delpacibart etedesiran (del-desiran), for treating myotonic dystrophy type 1 (DM1).
Avidity Biosciences had experienced a setback in September 2022 when the FDA imposed the partial clinical hold due to a serious adverse event reported during the Phase 1/2 MARINA study. However, the FDA eased the restrictions in May 2023, allowing for an increase in patient enrollment and dose escalation in the ongoing MARINA open label extension (MARINA-OLE) study.
The company is actively progressing with its Phase 3 HARBOR trial, which is assessing the efficacy of del-desiran at a 4 mg/kg dose administered every 8 weeks compared to a placebo in a group of 150 DM1 patients. The trial's topline data is anticipated to be released in 2026.
The recent FDA decision is seen as a positive signal for the safety profile of del-desiran, which has previously been a concern for investors. Goldman Sachs forecasts risk-adjusted peak sales for del-desiran in DM1 to reach approximately $3 billion, with a probability of success estimated at 75%.
In other recent news, Avidity Biosciences has experienced several significant developments. The U.S. Food and Drug Administration (FDA) lifted the partial clinical hold on Avidity's investigational drug, delpacibart etedesiran, permitting the continuation of clinical trials. This decision followed the positive preliminary results from a Phase 1/2 clinical trial for delpacibart zotadirsen, demonstrating substantial increases in dystrophin production and exon 44 skipping.
Avidity Biosciences also announced a $250 million public offering of common stock, managed by Leerink Partners and TD Cowen, to support its clinical programs and advance its research and development. Goldman Sachs initiated coverage on the company, emphasizing the potential of its drugs del-brax and del-desiran, with projected peak sales of $2.7 billion and $4.0 billion, respectively.
Analysts from BofA Securities and Wells Fargo maintained positive ratings on Avidity's stock, reflecting interest in these developments. Lastly, the FDA granted Breakthrough Therapy designation to Avidity's lead investigational drug, delpacibart etedesiran, for the treatment of myotonic dystrophy type 1.
InvestingPro Insights
Avidity Biosciences (NASDAQ:RNA) has shown remarkable market performance, with InvestingPro data revealing a staggering 653.92% price total return over the past year. This impressive growth aligns with the positive sentiment expressed in Goldman Sachs' reiterated Buy rating and the FDA's decision to lift the partial clinical hold on del-desiran.
Despite the company's strong market performance, InvestingPro Tips highlight that Avidity is not currently profitable and is not expected to be profitable this year. This is not uncommon for biotech companies in the developmental stage, especially those with promising drug candidates like del-desiran.
Interestingly, another InvestingPro Tip notes that 6 analysts have revised their earnings upwards for the upcoming period, suggesting growing optimism about Avidity's financial prospects. This could be related to the progress of the HARBOR trial and the potential for del-desiran to reach its estimated $3 billion peak sales.
For investors seeking a more comprehensive analysis, InvestingPro offers 14 additional tips for Avidity Biosciences, providing a deeper understanding of the company's financial health and market position.
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