HCW starts Tobira Therapeutics at buy

H.C. Wainwright has initiated coverage of Tobira Therapeutics (NASDAQ:TBRA) with a “buy” rating and $22 price target. The stock closed at $7.30 on Friday.

Tobira is focused on the development of a sole drug candidate, cenicriviroc (CVC), as a treatment for non-alcoholic steatohepatitis (NASH). NASH is a disease of the liver that can lead to fibrosis, cirrhosis, and ultimately, transplant or hepatocellular carcinoma.

Analyst Ed Arce writhes that CVC is a first-in-class, once-daily, oral, dual inhibitor of C-C chemokine receptor types 5 and 2 that has demonstrated direct and potent anti-inflammatory and antifibrotic effects in several well-validated animal models, as well as reduced soluble CD14 levels, AST-to-platelet ratio index, Fibrosis-4 and enhanced liver fibrosis scores in HIV-positive subjects.

Unlike Intercept’s obeticholic acid, he said CVC has shown not only a favorable safety profile in about 600 subjects, confined mostly to mild nausea, fatigue and headache, but also a favorable lipid profile of reduced LDL-C, as well.

“We believe the Phase 2b CENTAUR study readout in the third quarter this year represents a potentially transformative event for the company and the shares,” he added, citing it is the first data of CVC in NASH patients; clinical endpoints include the current consensual approvable surrogate endpoint for NASH; and positive results will likely lead to the initiation of a Phase 3 trial in NASH in the first half of 2017.

“With what we view as a highly de-risked development program, a clear regulatory path to accelerated approval, and fast track status, Tobira is well-positioned for clinical and regulatory success,” Mr. Arce said.