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Biotechs can be a risky investment, but where the risks are high, so potentially are the gains. Wilsons Advisory forecasts more than 100% upside for PYC Therapeutics Ltd (ASX: PYC).
PYC, which is valued at about $720m, is developing a drug candidate, PYC-003, which addresses the underlying cause of polycystic kidney disease (PKD).
The company recently presented data from an ongoing Phase 1a/1b trial of the drug, which the company said had the objective of evaluating the safety and tolerability of PYC-003.
"PYC will continue to update shareholders on progress within this high-velocity clinical development program on each of the milestones outlined in this announcement," the company said.
Analysts at Wilsons Advisory have an overweight rating on the stock, with a price target of $3, more than 130% higher than the current share price.
We maintain our overweight rating on PYC with a risked price target of $3.00/share. PYC has presented initial safety data from their ongoing phase 1a trial. We are inching our way closer to the initial efficacy data, coming from ph1b in 2026.
Wilsons said competition in the sector was starting to heat up, but PYC was still a top pick.
Although details of the competitor programs remain scarce in these early stages, we remain confident in PYC-003 addressing the root cause of the disease, giving it the potential of a best-in-class asset. As PYC and Novartis/Regulus progress their programs we expect to see other major players entering the field, as well as the potential for M&A to increase. We are already seeing early clinical trials from GSK, Vertex and AbbVie.
Wilsons notes that polycystic kidney disease has proven difficult to treat, with several companies discontinuing their research programs and only one compound currently approved by the US Food and Drug Administration (FDA) to date.
This is a large addressable market greater than $15 billion in a difficult to treat indication indicative of a market with high longevity that can become winner takes all/most due to the high barrier of entry.
Wilsons sees the value of PYC-003 alone at $1.95 per share.
