Stock Analysis & Ideas

BELLUS Shares Have More Room to Run, Says Analyst

The week started in the best possible way for BELLUS Health (BLU) stock. While the main indexes bled in Monday’s session, BLU shares took the up escalator, surging by 48% following the announcement of positive clinical trial results.

The company is testing lead candidate BLU-5937 as a potential therapy for refractory chronic cough (RCC). Topline results from the Phase 2b SOOTHE study of the P2X3 inhibitor showed the drug made a statistically meaningful difference; after 28 days of treatment there was a significant improvement to RCC patients’ daily cough frequency, with a placebo-adjusted cough reduction of 34.4% in the 50mg cohort and a 34.2% drop in the 200mg group. Importantly, there were no adverse events noted with only low rates of taste-related side effects.

Next up, the company will ask the FDA for an End of Phase 2 meeting, which should take place in next year’s second quarter. The talks will center around the Phase 3 program, which should kick off in 2H22.

Cowen’s Ritu Baral is confident that the trial will yield positive results too, which could set the scene for the drug to become the first approved treatment specially designed to treat the 9 million Americans suffering from a chronic cough.

“We are very encouraged by the robust (better than expected) cough reductions and low rate of mild taste AE’s in the SOOTHE data, which suggests ‘5937 could be potentially the best-in-class P2X3 inhibitor in rCC,” the analyst said. “We think today’s data are cleanly positive on efficacy, with very acceptable safety (especially with the 50mg dose) and best-in-class tolerability. We think this data also bodes well for the chances of success in Ph3 and ultimate regulatory approval.”

To this end, Baral rates BLU an Outperform (i.e. Buy) and sets a price target of $15. Even after Monday’s excellent performance, Investors are looking at further upside of ~80%. (To watch Baral’s track record, click here)

Baral is by no means on her own here. All 5 other recent analyst reviews are positive, resulting in a Strong Buy consensus view. The $16 average target is slightly higher than Baral’s objective and set to reward investors with returns of ~93%, should the target be met over the one-year timeframe. (See BELLUS stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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