On Friday, Leerink Partners maintained their Outperform rating and $26.00 price target for Sagimet Biosciences Inc (NASDAQ:SGMT) stock, following a series of investor meetings with the company's management team. The discussions highlighted the potential of Sagimet's drug, denifanstat, an oral FASN inhibitor, in treating non-alcoholic steatohepatitis (NASH).
The management team, including CEO David Happel, CMO Eduardo Martins, and CFO Thierry Chauche, provided insights on denifanstat's unique mechanism that addresses various aspects of NASH pathogenesis. They also shared positive results from the Phase 2b FASCINATE-2 trial, which demonstrated competitive rates of fibrosis improvement and NASH resolution. Notably, a more profound effect was observed in patients with stage F3 fibrosis, along with early indications of reduced progression to cirrhosis (stage F4).
Sagimet's management also addressed the safety and tolerability profile of denifanstat, particularly concerning hair thinning adverse events, which they believe to be manageable in both clinical trial and real-world settings. The design of the upcoming Phase 3 FASCINATE-3 trial was also discussed. The trial is expected to commence by the end of 2024, subject to regulatory alignment and funding for primary readouts.
Further, the meetings touched upon denifanstat's potential role in the NASH treatment landscape, where it could be used as a monotherapy or in combination with other therapies. Additionally, Sagimet's partner, Ascletis, is enrolling a pivotal Phase 3 study of denifanstat in China for acne treatment, with topline data from approximately 480 patients expected in the first quarter of 2025. Sagimet also plans to initiate a Phase 1 study for their next-generation FASN inhibitor, TVB-3567, early next year.
Leerink's continued support for Sagimet is bolstered by the recent Breakthrough Therapy Designation granted by the FDA for denifanstat, acknowledging the drug's promising profile as shown in the FASCINATE-2 trial. The firm views Sagimet as an attractive investment within the NASH market, noting its trading at a relative discount compared to its competitors and its strong correlation to the broader market sentiment for NASH treatments.
InvestingPro Insights
Recent InvestingPro data and tips provide additional context to Sagimet Biosciences' (NASDAQ:SGMT) current financial position and market performance, which is particularly relevant given the company's focus on developing denifanstat for NASH treatment.
InvestingPro data shows that Sagimet's market capitalization stands at $131.49 million, reflecting its status as a clinical-stage biopharmaceutical company. The company's revenue for the last twelve months as of Q2 2023 was $2 million, with a gross profit of $2 million, indicating a 100% gross profit margin. This aligns with the pre-revenue nature of many biotech firms focused on drug development.
An InvestingPro Tip highlights that Sagimet holds more cash than debt on its balance sheet, which is crucial for a company in the capital-intensive process of drug development and clinical trials. This financial position could provide the necessary runway for the upcoming Phase 3 FASCINATE-3 trial mentioned in the article.
Another relevant InvestingPro Tip notes that analysts anticipate sales growth in the current year. This expectation may be linked to the potential progress of denifanstat and the company's other pipeline assets, including the planned Phase 1 study for TVB-3567.
It's worth noting that InvestingPro offers 11 additional tips for Sagimet Biosciences, providing a more comprehensive analysis for investors interested in the company's prospects in the competitive NASH market.
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