Analysts up Zogenix to OP, double price target to $55

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William Blair upgraded Zogenix (NASAQ:ZGNX) to “outperform” and Stifel more than doubled its price target to $55 from $26 after the company unveiled strongly positive Phase 3 data for ZX008 (fenfluramine) in Dravet syndrome. 

Shares of Zogenix closed at $35.05, up $22.17, or 172%, on Sept. 29.

“[Friday’s] results were far better than we expected on the back of small open-label studies and represents our upside case, warranting ZX008’s front-line use in this severe epileptic population,” writes analyst Annabel Samimy.

“We believe it has strong potential to become standard-of-care and look forward to expansion into other rare epileptic disorders,” she added.
 
In its primary endpoint, Study 1 achieved a 63.9% reduction in mean monthly convulsive seizure frequency over placebo, a larger reduction than Ms. Samimy had assumed in her base case and consistent with the long-term Belgian data, she said. 

Efficacy was also seen for the low-dose cohort, indicating dose response, and on all key secondary measures. ZX008 was well tolerated with a safety profile consistent with known fenfluramine adverse events and clear of cardiovascular effects. 

Analyst Tim Lugo of William Blair said that at first glance, the efficacy demonstrated by ZX008 looks superior to that of GW Pharmaceuticals’ cannabinoid candidate, Epidiolex, which showed a 39% median reduction in convulsive seizures during the treatment period of its Phase 3 trial, compared with 13% in the placebo group

The company expects to read out Phase 3 data from its second Dravet study during the first half of 2018, which could lead to a regulatory filing during the second half of 2018, “although given strong results from Study 1, an FDA filing may come earlier depending on a meeting the company intends to have with the FDA in the near term,” he added.