Monday turned out to be a nightmare for Gemphire Therapeutics Inc (NASDAQ:GEMP) investors, after the biopharmaceutical company reported disappointing LDL data from its Phase 2b ROYAL-1 clinical trial in hypercholesterolemic patients.
“In ROYAL-1, gemcabene met the primary endpoint and demonstrated a statistically significant lowering in LDL-C, although the magnitude of LDL-C lowering was less than observed in certain prior studies of gemcabene,” stated Dr. Lee Golden, Chief Medical Officer. “The company will perform additional analyses to thoroughly evaluate the results of the trial. Once the additional analyses are complete, we will provide an update.”
In reaction, Gemphire shares slashed by nearly half, down to $9.35.
Canaccord analyst John Newman actually seeing the data as positive, noting: “GEMP reported positive top-line data from Phase 2b ROYAL-1 trial, reducing LDL-C by 17.2%, which is slightly below the 20-30% reduction we expected, but still clinically meaningful when considered with safety. Furthermore, the reduction magnitude may be higher for moderate intensity statins vs high intensity. This is critical since only ~7% of patients on statins in the real world receive high-intensity statins.”
The analyst concluded, “We are maintaining our BUY rating with $31 PT based on the positive top-line data from ROYAL-1, the clean safety profile, and the possible cardiovascular benefit of gemcabene. In addition, if we were to assume gemcabene is approved for HoFH, HeFH, and severe hypertriglycerides (100% probability for all instead of the 40% we use in our current NPV valuation model), our PT calculation would work out to $74. We continue to utilize a probability-adjusted net present value calculation to generate our price target.” (To watch Newman’s track record, click here)
Gemphire Therapeutics, Inc. is a clinical-stage biopharmaceutical company, which engages in the development and commercialization of therapies for the treatment of dyslipidemia. Its product under the Gemcabene name is used an adjunctive therapy to reduce low-density lipoprotein cholesterol, high-sensitivity C-reactive protein, and triglycerides.