Leerink analyst Paul Mattels is assuming coverage of Edge Therapeutics (NASDAQ:EDGE) with an “outperform” rating and $21 price target. The stock closed at $9.40 on March 2.
“We view EDGE as a logical fit within our CNS focused universe,” Mr. Mattels writes. “We are assuming coverage of the stock with a positive view ahead of Phase 3 data for lead product, EG-1962, in aneurysmal subarachnoid hemorrhage in 2018 (full data expected ~3Q), with an interim analysis on track for 1Q18 as 43 sites are actively screening patients,” he added.
Citing positive Phase 2 results, conservative powering and direct CNS delivery of a proven medicine, Mr. Mattels is modeling a 65% odds of success for the Phase 3 trial, which he said is higher than average for neuroscience.
The NEWTON2 pivotal study was initiated in mid-2016 and is expected to
enroll 374 patients across approximately 80 sites worldwide. EDGE has powered NEWTON2 for a 15% treatment difference versus oral nimodipine. That implies a 43% benefit for EG-1962, which seems achievable and potentially conservative given the 32% treatment difference seen in the NEWTON Phase 2 study.
EDGE will also conduct an interim analysis when 210 patients have been treated. “Should a greater than 20% treatment difference be detected, this could potentially trigger termination of the trial, which would enable an earlier NDA filing than we currently assume,” Mr. Mattels added.