Analysts Chime in on Two Collapsing Biotech Stocks: Mast Therapeutics Inc (MSTX) and Mirna Therapeutics Inc (MIRN)

The biotech world is sounding the alarm on Mast Therapeutics Inc (NYSEMKT:MSTX) and Mirna Therapeutics Inc (NASDAQ:MIRN) after MSTX now has a Phase III failure on its hands and MIRN has chosen to halt its Phase I until further notice. Let’s take a closer look:

Mast Thereapeutics Inc

MSTX’s pipeline drug Vepoloxamer, also known as MST-188, the biotech firm’s rheological agent designed to improve blood patency, just missed the primary endpoint in its Phase III trial evaluating patients suffering from sickle cell disease and experiencing Vaso-Occlusive Crisis.

As a result, all of the drug’s clinical development will likely now result in termination. MSTX’s hopes are left to transfer to its other drug, AIR001, an inhaled nebulized sodium nitrite designed to treat heart failure with preserved ejection fraction (hFpEF), anticipated to complete a Phase II hFpEF trial enrollment by the close of 2017.

Mast Thereapeutics shares reacted to the bad news, crashing over 80% to $0.48.

Despite the setback, Cowen analyst Ritu Baral reiterates an Outperform rating on shares of MSTX without listing a price target.

Baral notes, “MSTX now plans to conduct an interim look in its ongoing Ph2 trial of vepoloxamer in heart failure, but already suggested it expects to terminate all clinical development of vepoloxamer. MSTX is holding a conference call tomorrow, at 8:00 a.m. ET to discuss the Phase 3 results. We awaiting their comments to update our model.”

As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, five-star analyst Ritu Baral is ranked #278 out of 4,172 analysts. Baral has a 51% success rate and gains 7.9% in her yearly returns. When recommending MSTX, Baral realizes 7.4% in average profits on the stock.

TipRanks analytics show MSTX as a Strong Buy. 100% of analysts polled in the last 3 months rate a Buy on MSTX. The 12-month average price target stands at $3.33, marking a nearly 2,462% upside from where the stock is currently trading.

Mirna Therapeutics Inc

Mirna must now confront the aftermath of halting its Phase I trial of its pipeline drug MX34, a mimic of naturally occurring microRNA 34 (miR 34) encapsulated in a liposomal nanoparticle formulation and considered the first microRNA mimic to enter clinical development in cancer.

Cantor Fitzgerald analyst Mara Goldstein deems this use of microRNA “a novel technology,” and considers this a “serious adverse” change in events compared to this time last month, when the firm had “first disclosed immune-related toxicities.”

In reaction, the analyst downgrades from a Buy to a Hold rating on MIRN, while slashing the price target from $14 down to $2. Mirna shares are currently trading down 23% at $1.90.

Goldstein believes, “And while we have observed events like these in other oncology drug trials, without a definitive plan for the compound, supporting data or additional capital, we think the shares are likely to trade below cash. Though we typically like entry points such as this, particularly when the company has a strong cash runway, without a more advanced pipeline, we do not see a reason to be more constructive on the shares. Our bias, though, is to rate the shares HOLD rather than BUY, as we think the cash value can be put to work.”

For now, Goldstein questions MIRN’s uncertain steps forward for MX34, especially considering the current cloud of confusion surrounding just why the drug now has an adverse profile. The translational studies the firm had already planned as a delay as of last month is now a path the firm must tread lightly, and the analyst dismisses the studies now as likely “off the table.”

Ultimately, “Whether the drug can re-enter human trials with specific protocol modifications or another molecule (or utilization of a different delivery vehicle) is not yet clear, but realistically unlikely to be known until next year, in our view,” Goldstein concludes.

According to TipRanks, one-star analyst Mara Goldstein is ranked #3,450 out of 4,172 analysts. Goldstein has a 41% success rate and faces a loss of 1.6% in her annual returns. When recommending MIRN, Goldstein loses 40.0% in average profits on the stock.

TipRanks analytics exhibit MIRN as a Hold. Based on 5 analysts polled in the last 3 months, 1 rates a Buy on MIRN, while 4 maintain a Hold. The consensus price target stands at $4.25, marking a 126% upside from where the shares last closed.


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