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Cytokinetics Stock: Next Stop, $44?

Monday was a good day to be a Cytokinetics (CYTK) investor. On what was a down day for the markets across the board, shares took off to the tune of 40% after the company announced positive results from a mid-stage study of its potential therapy for a hereditary heart disease.

Specifically, top-line results from the Phase 2 REDWOOD-HCM for CK-274 in obstructive hypertrophic cardiomyopathy (oHCM), showed meaningful improvements in Left Ventricular Outflow Tract (LVOT) gradients; the responder rate came in at ~75% in one cohort and ~93% in the second cohort compared to just ~8% in the placebo group.

HCM causes the heart muscle to thicken, making it pump aggressively. The results suggest CK-274, an oral cardiac myosin inhibitor, can get HCM sufferers’ heart to relax while doing so safely.

The performance bettered that of Bristol Myers Squibb’s mavacamten which is also going after the same indication and is currently being reviewed by the FDA.

Further standing in Cytokinetic’s stead, is the fact CK-274 was able to achieve these results faster that its competitor, with the majority of patients attaining a steady titration in 6 weeks or less vs. the 12 weeks it took mavacamten to do so.

JMP Securities’ Jason Butler calls the data “compelling” which support the drug’s “best-in-class potential.”

“These results further strengthen our view that CK-274 is meaningfully differentiated from Bristol Myers Squibb’s mavacamten, not only in terms of the drug’s usability, but also the ability to deliver disease-normalizing improvements in LVOT with a clean safety profile,” the analyst went on to say.

Next up, an end of Phase 2 meeting with the FDA should take place this quarter, and by the end of the year, Cytokinetics anticipates to initiate a Phase 3 trial for CK-274 in oHCM.

“We look to additional details on the Phase 3 trial design (e.g., target patient population) that could support further differentiation from mavacamten, vs. improved ease of use/titration, and outstanding efficacy demonstrated in the REDWOOD-HCM trial,” Butler summed up.

All the above merits a new price target, which the analyst raised from $26 to $44, implying upside of ~50% from current levels. Butler’s rating remains a Market Outperform (i.e., Buy). (To watch Butler’s track record, click here)

Overall, the bulls are out in heavy attendance for CYTK. Barring a single Hold rating, all 8 other analysts who published a review over the last 3 months, recommend the stock as a Buy. With an average price target of $43.44, the analysts foresee further upside of ~48% in the months ahead.(See CYTK 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.