Stock Analysis & Ideas

MEI Pharma: There’s More Upside Ahead, Says Analyst Who Made a Winning Call

On market down days there are always outliers bucking the overall trend and as the main indexes took a beating on Tuesday, it was MEI Pharma’s (MEIP) turn to play the contrarian. Shares gained 37% in the session after the cancer-focused biotech released positive data from a mid-stage clinical trial.

Specifically, in the Phase 2 TIDAL study assessing zandelisib as a single agent for follicular lymphoma (FL) patients who had been given at least 2 prior systemic therapies, the drug showed a 70.3% objective response rate (ORR) and a complete response (CR) of 35.2%. As with the Phase 1B study, zandelisib was generally well tolerated.

The results confirm H.C. Wainwright’s Andrew Fein’s confidence the trial would yield the correct results. The analyst had previously told investors he believed the trial would prove to be a success. In fact, even after Tuesday’s share gains, Fein thinks the market is underappreciating the opportunity here.

“We believe that based on the positive TIDAL data, zandelisib has a high likelihood of approval in 3L FL. While the data package is positive, we believe the stock is not reflective of the significant market opportunity in r/r/ FL and note that more than 8,000 FL patients progress to r/r per year,” Fein said. “We remind investors that the positive TIDAL study only represents the tip of the iceberg when it comes to the full market opportunity of exploring zandelisib as a full backbone therapy in FL.”

Zandelisib is also currently being evaluated in 2L FL and MZL (marginal zone lymphoma) in combination with rituximab (COSTAL), R-CHOP in DLBCL (1L) and in CLL in combination with Ven-R. Fein is “optimistic” regarding these programs too.

While there are still 30 patients from The TIDAL study which need to be evaluated, the data announced from the 91 patients amounts to the primary efficacy population for the assessment of ORR and DOR (duration of response). To support an accelerated approval application, the data will be submitted to the FDA.

“Therefore,” Fein summed up, “With the ORR representing the primary endpoint of the study, overall, we are encouraged by zandelisib’s profile thus far and reiterate our belief that zandelisib is on track to garner a 3L label.”

To this end, Fein reiterated a Buy rating for the shares, backed by a $10 price target, indicating shares will gain a mighty 210% over the coming year. (To watch Fein’s track record, click here)

Fein’s colleagues wholeheartedly agree; with Buy ratings only – 6, in total – the stock boasts a Strong Buy consensus rating. The average price target makes Fein’s objective appear conservative; at $13, the analysts see the stock yielding returns of 286% over the one-year timeframe. (See MEIP 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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