HCW starts Windtree Therapeutics at buy

H.C. Wainwright has launched coverage of Windtree Therapeutics (NASDAQ:WINT) with a “buy” rating and $8 price target, ahead of study readouts on tap for the next 12 months. The stock closed at $3.03 on Thursday.

“We believe that the company’s investigational drug/device combination, Aerosurf, which aims to deliver aerosolized surfactant to neonates with respiratory distress syndrome (RDS), is competitively positioned to be the first deliverable, noninvasive surfactant therapy in an otherwise under saturated market,” writes analyst Andrew Fein.

“The recent name change (from Discovery Laboratories) and new management mark a commitment to leave the past behind (corroborated by the voluntary decision to withdraw Surfaxin from market in the second of 2015) and to focus on the one asset that has game-changing potential for the company, as well as for the neonatal space,” he added.

Mr. Fein contends that Aerosurf has an advantage over other aerosolized surfactants/minimally invasive techniques, not only by having a more clinically mature product, but also as a drug/device combo, and is significantly de-risked.

“As we move deeper down Aerosurf’s developmental path, now with some assurance that the program will be executed and funded until completion, we believe any indication of targeted delivery, continued safety, and dose specification from the Phase 2a (topline 3Q16) and Phase 2b (topline 1Q17) bode well for the pivotal Phase 3 where the study is likely to be more appropriately powered based on Phase 2a studies and ongoing observational studies, and provide a strong proof-of-concept for the delivery modality of aerosolized medications,” Mr. Fein said.

He said that even beyond the potentially paradigm-shifting capability of Aerosurf for neonatal RDS, the more interesting case for long-term value of Windtree lies in its expertise in delivery technologies of aerosolized.