On Friday, UBS reiterated its Buy rating on 89bio Inc . (NASDAQ:ETNB) with a steady price target of $25.00. The firm's analysis followed the presentation of full results for survodutide at the European Association for the Study of the Liver (EASL) and the concurrent release of a publication in the New England Journal of Medicine (NEJM).
The data showed that survodutide, a GLP-1/glucagon receptor dual agonist, demonstrated activity against liver fibrosis in the F2/3 patient population. However, a noted high discontinuation rate was said to significantly reduce the effects in the intention-to-treat (ITT (NYSE:ITT)) population. Additionally, there were some concerns raised regarding potential cardiac safety risks, as highlighted by physician checks at the EASL conference.
The UBS analyst highlighted that while survodutide displayed an antifibrotic benefit, fibroblast growth factor 21s (FGF21s) have shown more robust anti-fibrotic effects, particularly in the ITT population at 24 weeks, compared to survodutide at 48 weeks. In patients with stage F3 fibrosis who are at risk of progressing to F4, the rapid onset of benefit from FGF21s could be a decisive factor for physicians and patients.
The report also mentioned that discontinuation rates for survodutide were relatively high compared to FGF21s. Moreover, the long-term cardiac adverse events in a large patient population remain a concern, with future larger and longer studies needed to provide more data. An instance of serious adverse event (SAE) of angioedema was specifically noted during the presentation.
The UBS analyst expressed increased confidence in the launch uptake of Madrigal Pharmaceuticals (NASDAQ:MDGL)' Rezdiffra, based on positive feedback from physicians regarding their intent to prescribe the medication. This optimism also extends to potential upsides for Akero Therapeutics (NASDAQ:AKRO) and 89bio as the market launch of Rezdiffra progresses and as Akero approaches its 96-week data release for stage F4 fibrosis in the first quarter of 2025. The firm hosted Akero management for an investor dinner on Thursday, reaffirming a high conviction in the FGF21 class and the significant upside for both companies' stocks.
In other recent news, 89bio Inc. is making strides with its drug candidate, pegozafermin, which is currently in advanced clinical trials for treating Metabolic Associated Steatohepatitis (MASH). With the FDA's favorable stance on outcomes measures and patient selection in cirrhosis studies, the approval process for pegozafermin could be expedited. Amidst these developments, analysts have provided mixed reviews on 89bio's financial prospects. Cantor Fitzgerald maintains an "Overweight" rating, while RBC Capital Markets has given a "Sector Perform" rating due to model adjustments. Evercore ISI has reduced 89bio's price target to $33 due to projected expenses, while H.C. Wainwright lowered its target to $29, but sustained a Buy rating. In contrast, BofA Securities initiated coverage with a Buy rating and a price target of $30, citing the promising prospects of pegozafermin. Despite the competitive landscape, these recent developments underscore the potential of 89bio's drug candidate in the MASH treatment market.
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