Clarity Pharmaceuticals Ltd (ASX: CU6) shares have been on form recently.
Thanks to some very exciting trial data, this speculative ASX stock has risen approximately 40% in just over two weeks.
The good news is that analysts at Bell Potter believe this strong share price rally can continue.
Image source: Getty Images
What is the broker saying?
Bell Potter highlights that the pharmaceuticals company has released further data from the SECuRE study, which is highly promising. It said:
76 yr old man with baseline PSA 3.25ng/mL and following multiple lines of previous therapy. Achieved undetectable PSA 7 weeks after first dose of 67Cu-SARbis-PSMA. The patient has since received a second round with no disease observed on PSMA PET. Adverse events were mild and transitory. No haematological or renal AEs.
CU6 has not published a complete response rate across the treated population of the SECuRE trial for several reasons including that the trial is ongoing and results were achieved across a variety of treatment protocols. Nevertheless, there are now five men from our estimate of 35 to 40 treated across each of the cohorts (including those in early dose escalation at sub therapeutic doses) with complete responses. This compares to a complete response rate of 9% achieved by Pluvicto in its 581 patient phase 3 approval study in post chemotherapy men.
The broker believes this data is "extraordinary." It adds:
This data is extraordinary not only for efficacy, but the safety profile is attractive. Three patients in the expansion cohort have experience grade 3 lymphopenia – all or part of which may be explained by previous taxane therapy. Otherwise the safety profile is relatively clean with the majority of AE's either grade one or two.
Should you buy this speculative ASX stock?
According to the note, in response to its latest data release, the broker has reaffirmed its speculative buy rating and $6.40 price target on Clarity's shares.
Based on its current share price of $3.82, this implies potential upside of 68% for investors over the next 12 months.
Commenting on its buy recommendation and what to look out for in the coming months, Bell Potter said:
The next major catalyst will be the detailed analysis of data from the Co-PSMA study to be presented at the European Urology Ass'n conference in London next month. The headline data demonstrated a highly statistically significant difference in detection rates of 64Cu-SAR-bisPSMA vs 68Ga-PSMA11. Bottom line is we expect this will lead to a step change in specificity.
For the estimated +1m men in the US today with rising PSA following RP and for whom neither 68Ga or 18F is able to detect disease, the introduction of 64Cu-SAR-bisPSMA will be a game changer, allowing disease to be located and treated, either with XBR or surgery or both. We expect this data will dominate Urology conferences in the lead up to a potential approval in late CY27.
Overall, this could make Clarity worth considering if you have a high tolerance for risk.
