There’s no other way of putting it, Monday was a horrible day to be a BridgeBio Pharma (BBIO) investor. Shares cratered by 72% after a late-stage study of a heart disease drug went awry.
Specifically, the company reported results from the Phase 3 trial of acoramidis for the treatment of patients with transthyretin amyloid cardiomyopathy, a condition in which the heart sees an increase of abnormal protein. The drug failed at the primary endpoint of a 6-minute walk test following 12 months of treatment, with acoramidis showing no advantages over the placebo.
Making matters worse, Pfizer’s similar drug Tafamidis (sold under the brand names Vyndaqel and Vyndamax) succeeded where acoramidis failed. This was doubly painful for BioBridge as it set out to show its offering was superior.
Echoing Chief Executive Neil Kumar’s statement that the result was “baffling and disappointing,” Mizuho analyst Salim Syed says the outcome was “odd and not fully explainable at the moment.”
The main question on investors lips right now, according to the analyst, has less to do with the actual trial results – Syed thinks most people have “already accepted them as is for the most part” – but more to do with the stock’s valuation.
Even though a read out for Part B (i.e., mortality data) is still slated for around mid-2023, with the stock plunging as it did, a new paradigm has been established.
“Acoramidis is no longer the bulk of trading valuation, and the story is now flipped,” says the analyst. “Massive pipeline of drugs with no one drug dominating valuation + a call option on acoramidis because we still need Part B mortality to read out.”
Part of that “massive pipeline” could help boost sentiment over the coming months. Key catalysts on the horizon include a Phase 2 readout for infigratinib for achondroplasia in mid-22 and Phase 1/2 results of BBP-631, an AAV5 gene therapy for congenital adrenal hyperplasia in mid-2022, as well.
Back to the valuation issue, then, and here Syed lowered the price target from $86 all the way to $25. Interestingly, however, there’s still upside of 86% from current levels. The analyst’s rating stays a Buy. (To watch Syed’s track record, click here)
Overall, analysts are still fully behind this name; based on Buys only – 9, in total – the stock boasts a Strong Buy consensus rating. Moreover, the $32.38 average target is now set to yield one-year returns of 184%. (See BBIO stock forecast 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.
