Reaction to Morphic’s MORF-057 UEG abstract ‘likely overblown,’ says Wells Fargo

Wells Fargo thinks the negative reaction being seen in Morphic shares after the UEG abstract for the Phase 2a trial of MORF-057 was posted to the event’s site is “likely overblown.” The new info was the endoscopic improvement, or EI, rate of 25.7% at 12 weeks which “matched exactly” the clinical remission rate from MORF-057 in the trial and was “considerably lower” than vedo’s 41% at 6 weeks from its Phase 3 trial, says the analyst. However, past ulcerative colitis, or UC, trials shows variability across endoscopic improvement rates as it relates to clinical remission rate, the analyst contends. The firm, which would “chalk up the rates being the same to the small trial size,” believes the idea that MORF-057’s data is worse than vedo is driving the weakness, but “we don’t think this is conclusive at all.” Wells has an Overweight rating and $80 price target on Morphic shares and would be “buyers here.”