William Blair launched coverage of Akari Therapeutics (NASDAQ:AKTX) with an “outperform” rating. The stock closed at $11.62 on April 5.
Akari is focused on the development of next-generation complement inhibitors for the treatment of rare hematologic diseases.
Analyst Tim Lugo writes that lead candidate, Coversin, is a next-generation complement inhibitor looking to enter the same therapeutic category that Alexion's Soliris created, which was the basis of one of the most successful biotech launches of the past 20 years.
“Given the alternative binding site of Coversin versus Soliris, the product should find a niche in non-Soliris-responding patients whose genetic mutations prevent the activity of Soliris,” he added.
Mr. Lugo said Akari has already successfully treated one such European patient and presented the data at the 2016 American Society of Hematology meeting.
While one patient's worth of data is far from definitive, “we like the risk/reward profile of shares ahead of the company's Phase 2 study,” he said. To date, the product has a clean side effect profile from Phase 1 data in healthy patients.
Given the well-understood role of complement in a number of diseases, Mr. Lugo said the current market cap of about $137-million presents a heavily weighted risk/reward profile with a potential fivefold return on the upside if Coversin shows efficacy in paroxysmal nocturnal haemoglobinuria patients.