Clarity Pharmaceuticals Ltd (ASX: CU6) has some big news coming this year, and the team at Canaccord Genuity is excited by the company's potential.
The Canaccord team has a buy recommendation on the stock, and while they've reduced their price target on the company, it's still extremely bullish. We'll get to that later.
Firstly, why is there cause for interest around what the company is doing?
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Prostate cancer plans progressing
Canaccord says the major focus for Clarity in the company year are its two Phase III diagnostic trials, "assessing 64Cu-SAR-bisPSMA in PSMA-avid prostate cancer''.
Canaccord goes on to say:
We are expecting readouts from both trials in 2H CY26. If positive, we would anticipate FDA submission and potential launch in 1H CY28. The company has begun bolstering its access to 64Cu in the US, having recently added Theragenics to its existing agreements with SpectronRx and Nusano. With 64Cu supply no longer a question in our minds, our attention turns towards the sales, marketing and distribution side of the equation.
Clarity said in late March that it had signed a large-scale manufacturing agreement for the supply of copper-64 (64Cu) with Theragenics, with the manufacture to take place in Atlanta, Georgia.
Clarity Executive Chair Dr Alan Taylor said at the time:
Clarity is closer than ever to commercialisation of 64Cu-SAR-bisPSMA, with outstanding data recently released from the head-to-head Co-PSMA investigator-initiated trial3 and our announcement on achieving our target number of participants in the Phase III AMPLIFY trial just months since imaging the first patient.
Large addressable market
Canaccord said they had reviewed the US market for PSMA (Prostate-Specific Membrane Antigen) compounds and forecast the 2035 market to be worth US$2.9 billion.
They added:
Should 64Cu-SAR-bisPSMA be approved, and subsequently launch in 2H28, by FY35 we see Clarity generating US$860m in sales, representing 29% share. While there is pushback regarding workflow changes and incumbency, we are encouraged by the growing body of evidence (albeit with smaller patient numbers currently), which delineates 64Cu-SAR-bisPSMA from the current (and developing) players. We see that patients, clinicians, and pharma are all incentivised to find disease at earlier time points, allowing earlier intervention.
Canaccord has a price target on Clarity shares of $8.41, down from $9, with the reduction coming from foreign exchange changes and adjustments to the timelines for the company's portfolio.
This is well north of 100% up on the current share price for Clarity of $3.19. Clarity is valued at $1.14 billion.
