Wedbush Sets Expectations On Sunesis Ahead Of Its Phase III VALOR Data Of Qinprezo


In a research report issued today, Wedbush analyst David Nierengarten reiterated an Outperform rating on Sunesis Pharmaceuticals (SNSS) with a $10 price target, as the company should be unblinding the data from the Phase III VALOR study of Qinprezo (vosaroxin) imminently.

The following bullets contain some highlights from this report:

  •  What could go right? Our view has been that the relatively low early mortality for Qinprezo as seen in prior studies will essentially shift the overall survival curve to the right. Additionally, the study has been primed for success with the interim look pointing to a likely hazard ratio in the 0.8 range. Vosaroxin’s Phase II results showed 30- and 60-day mortality rates of 3% and 9%, lower than the typical 10%-20+% seen with standard of care and other (failed) experimental therapies. Also recall the trial design incorporated a one-time 225-patient increase if the interim look (conducted September, 2012) showed a hazard ratio in the “promising zone,” where adding that number of patients would significantly improve the study powering (to 90% powered at a HR of 0.77). This zone likely would indicate a hazard ratio at that time of ~0.8, given a hazard ratio outside of those bounds could have caused the trial to stop for futility or efficacy, or continued at the original enrollment level, given the likelihood of the statistical powering being sufficient with fewer patients.
  • What could go wrong? Higher-than-expected rates of transplant could confound the survival benefit. Management has indicated that more patients than expected have progressed to stem cell transplants. For reference, 26% of patients went on for stem cell transplantation in the Phase II study. The positive take on this would be that patients treated with Qinprezo are experiencing higher and more durable complete responses (with lower mortality rates), allowing for higher numbers of transplants. The negative take would be that, since this is a controlled clinical trial, all patients in this setting (both Qinprezotreated and control) are more likely overall than the typical AML patient to be able to undergo stem cell transplantation. With both arms potentially receiving subsequent efficacious treatment via transplantation, the overall survival benefit derived from Qinprezo could be obscured.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst David Nierengarten has a total average return of 12.8% and a 55.9% success rate. Nierengarten has a 8.0% average return when recommending SNSS, and is ranked #508 out of 3250 analysts.

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