XOMA Corp (NASDAQ:XOMA) recently released initial data from its single-dose trials for XOMA 358, the firm’s pipeline drug designed to treat rare endocrine diseases, congenital hyperinsulinism (CHI) and patients who experience hyperinsulinism following bariatric surgery (PBS), by reducing insulin receptor signaling.

Although the biotech firm is “limited in patient numbers,” Wedbush analyst Liana Moussatos remains positive on the drug’s “emerging efficacy and safety profile support proof-of-mechanism,” reiterating an Outperform rating on shares of XOMA. However, Moussatos lowers the price target from $3 to $1.42 following a delay of the analyst’s estimated launch dates and taking into account projected dilution.

As XOMA 358 takes steps forward in the clinic, the analyst asserts, “We see additional data releases and updates on the development plan as essential for the stock to regain investor favor.”

Moreover, in light of the initial pipeline drug data, Moussatos adds, “We believe these results (coupled with the data in 22 healthy volunteers) suggest ‘358 could be an effective treatment through normalization of insulin signaling and glucose levels.”

Particularly considering an unmet need in treatment options for these rare endocrine conditions, the analyst foresees “abbreviated design for registration trials,” and predicts XOMA 358 approval could be underway for CHI as early as 2021 and for PBS potentially by 2022.

“We anticipate a reverse stock split in Q4 and initiation of a multi-dose study and additional data releases for XOMA 358 in CHI and PBS in 2017,” Moussatos concludes.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, five-star analyst Liana Moussatos has a 41% success rate and garners 10.9% in her annual returns. However, when recommending XOMA, Moussatos faces a loss of 53.1% in average profits on the stock.

TipRanks analytics exhibit XOMA as a Hold. 100% of analysts polled in the last 3 months rate a Hold on XOMA.