Wedbush downgrades Design Therapeutics to Neutral, cuts price target to $6

As previously reported, Wedbush analyst Laura Chico downgraded Design Therapeutics to Neutral from Outperform with a price target of $6, down from $19. On the plus side, the Phase 1 DT-216 MAD data showed dose-dependent frataxin mRNA increases, the firm notes. Parallel analytical work in healthy, FA carriers and FA patients also validated Design’s FXN mRNA analyses were reliable and could discriminate the cohorts. However, FXN protein analyses exhibited high variability and could not be used to quantify FXN levels, Wedbush adds. While Phase 1 data appears encouraging and should not be overlooked, the firm points out that clinical work pauses as Design advances a backup formulation. Five cases of mild/moderate injection site thrombophlebitis attributed to excipients in the DT-216 formulation triggered the switch. A new formulation will advance in the second half of 2024, with data expected in the first half of 2025. Nevertheless, with data events not until 2025, the stock is likely to be range bound to an extent, Wedbush adds.