Catabasis Pharmaceuticals Inc (NASDAQ:CATB) shares are falling almost 8% amid an unfortunate setback with the firm’s MoveDMD Part B data read-out that failed to meet statistical significance. Though H.C. Wainwright analyst Carol Werther adjusts her model to anticipate a now one year delay in the launch for edasalonexent for the treatment of Duchenne’s Muscular Dystrophy, she nonetheless continues to back the stock, deeming the pullback largely as overblown.
In reaction, the analyst reiterates a Buy rating on CATB while slashing the price target from $14 to $8, which represents a 459% increase from where the shares last closed.
Werther opines, “Although MoveDMD Part B results were not statically significant, the majority of the clinical parameters demonstrated positive impact. It is possible that longer duration of treatment may show improvement. Since the safety was good and the higher dose was numerically better, all participants are in the process of being changed over to the 100 mg TID. The company does not believe a higher dose is necessary. We do not expect the Phase 3 trial to begin until 2018; we have adjusted our model accordingly and raised the discount rate.”
“We are sticking with our Buy rating. We believe that NF-kB is a validated target for treatment of DMD ant that takes longer than 12 weeks to expect to see functional benefit in DMD patients. In our opinion, the investor overreaction has left the company with a negative enterprise value that does not reflect the totality of the technology and pipeline,” Werther contends.
Looking ahead, new Part B data should surface at the Muscular Dystrophy Association meeting this Wednesday with full results of the open label Part C data anticipated to hit later this year. CATB closed the financial year with $38.5 million in cash flow, which management expects should carry the firm through the first quarter of 2018.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, five-star analyst Carol Werther is ranked #184 out of 4,560 analysts. Werther has a 64% success rate and earns 34.2% in her annual returns. However, when recommending CATB, Werther loses 59.7% in average profits on the stock.
TipRanks analytics demonstrate CATB as a Buy. Based on 5 analysts polled by TipRanks in the last 3 months, 3 rate a Buy on Catabsis stock while 2 maintain a Hold. The 12-month average price target stands at $6.90, marking a nearly 386% upside from where the stock is currently trading.