Reneo Pharmaceuticals initiated with a Buy at BofA

BofA analyst Jason Zemansky initiated coverage of Reneo Pharmaceuticals with a Buy rating and $23 price target. Lead asset mavodelpar’s upside has been “overlooked by the Street” ahead of its pivotal phase 2 readout, says the firm, which a sees the potential for first approval by year-end 2024 or early 2025 in Primary Mitochondrial Myopathy, or PMM, and “several additional indications poised to follow.” Safety concerns represent the primary drag on sentiment after toxicities derailed other members of mavodelpar’s class, the PPAR agonists, but the firm’s analysis suggests these concerns may be an overreaction given mavodelpar has seen no major safety signal thus far, the analyst tells investors.