PYC Therapeutics Ltd (ASX: PYC) recently had some good news from one of its drug trials, which has boosted its share price.
But there's plenty more upside to be had, according to the analyst team at Canaccord Genuity, which has a buy rating on the stock and a bullish price target, which we'll get to shortly.
Image source: Getty Images
Encouraging progress
Firstly, let's have a look at what was announced recently.
PYC said it is progressing an investigational drug candidate known as PYC-001, which "addresses the underlying cause of a blinding eye disease called Autosomal Dominant Optic Atrophy (ADOA)''.
The company announced on April 15 that the Safety Review Committee overseeing the Phase 1 Single Ascending Dose (SAD) study of PYC-001 had reviewed the data from the first four weeks of the trial and approved progression to a multiple dose study.
The company added:
PYC is now evaluating the safety and efficacy profile of repeat doses of PYC-001 in a global Multiple Ascending Dose (MAD) study of PYC-001 in patients with ADOA. The objective of this study is to establish clinical proof-of-concept prior to progression of the drug candidate into a global registrational trial directed towards supporting a New Drug Application for PYC-001 in ADOA. Safety and efficacy outcomes from this study will be presented throughout 2026 and 2027.
The company said ADOA affects one in every 35,000 people and there are currently no approved treatment options available.
Broad portfolio attractive
The Canaccord team said there was a lot to like about PYC; however, they were more focused on its potential kidney treatment.
They said in a research note to clients:
Following a large raise (A$600.5m, +400m shares), PYC is now sufficiently cashed up to progress its pipeline of RNA assets across its retinal, kidney and neuro indications. Like many, we are most intrigued by PYC's kidney asset, due to: a) its elegant mechanism of action, b) orphan indication with a large population (~95k US eligible patients), and c) well-defined, potential accelerated approval pathway.
PYC in February announced that its polycystic kidney disease candidate had approval to escalate dosing in a third cohort of patients following approval from the safety review committee.
Canaccord said, "We are excited to see PYC's program move into multiple ascending doses''.
We expect an update from the third cohort in the single ascending dose (SAD) portion in May, following which timelines related to the MAD will become clearer, and where the market should be focused.
Canaccord has a price target on PYC shares of $2.84 compared with the current price of $1.33.
PYC Therapeutics is currently valued at $1.28 billion.
