Synthetic Biologics Inc (NYSEMKT:SYN) shares were rising almost 29% yesterday as the news took off that the biotech firm won a Breakthrough Therapy Designation from the FDA for C. difficile infection (CDI) prevention drug ribaxamase. William Blair analyst Y Katherine Xu joins the bullish parade, believing this designation could mean cutting the red tape through accelerated development as well as to faster approval. Ribaxamase impressed the agency following a successful Phase IIb trial, where in co-administering with IV ceftriaxone, SYN’s drug meaningfully shot down the risk for patients to develop CDI, along with colonizing additional pathogenic bacteria- importantly all while safeguarding the microbiome.
Since Breakthrough Therapy Designations first sprang onto the biotech scene back in 2012, the analyst points out most firms do not make it past the application stage, so it is quite an achievement for Synthetic Biologics. In reaction to the news, the analyst reiterates an Outperform rating on SYN with a fair value of assessment of $5, which represents an 817% increase from where the shares last closed.
Xu asserts, “We believe the designation is highly validating for the strength of the ribaxamase Phase IIb data, and signals strong interest and support from the FDA. […] The base case could be that two pivotal studies are required for approval, and the Phase IIb study will serve as one. We expect the second study to be similar in size and design as the Phase IIb study. Any acceleration beyond this base case would be upside, in our opinion”
“We continue to believe the two pre-Phase III assets, ribaxamase and SYN-010, hold good probability for success and high commercial potential. With the regulatory paths for both assets mapped out, we believe the chance of securing at least one partnership to advance the programs while removing the financing overhang is strongly enhanced. […] Successfully partnering at least one of the assets during 2017 would be a strong positive catalyst for the company, and we believe with the ribaxamase Breakthrough Therapy Designation the chance of a partnership is greatly enhanced,” Xu contends.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, four-star analyst Y Katherine Xu is ranked #697 out of 4,560 analysts. Xu has a 49% success rate and earns 12.2% in her yearly returns. However, when recommending SYN, Xu loses 26.6% in average profits on the stock.
TipRanks analytics indicate SYN as a Buy. Based on 2 analysts polled by TipRanks in the last 3 months, both rate a Buy on Synthetic Biologics stock. The 12-month average price target stands at $6.00, which represents a nearly 991% upside from where the stock is currently trading.