Maxim starts Moleculin Biotech at “buy”; PT $3

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Maxim Group launched coverage of Moleculin Biotech (NASDAQ:MBRX) with a “buy” rating and $3 price target. The stock closed at $1.35 on Nov. 13.

Moleculin has three differentiated oncology programs: a STAT3 inhibitor for the treatment of brain cancer (WP1066), a chemotherapy for acute myeloid leukemia (Annamycin), and a glycolysis inhibitor for pancreatic and brain cancers (WP1122).

Analyst Jason McCarthy writes that what differentiates Moleculin’s STAT3 inhibitor is that it targets phosphorylated STAT3, or pSTAT3, which results in a direct attack of tumor cells. Glioblastoma patients in the company’s Phase 1 trial have recently received initial doses of WP1066, and Moleculin expects to receive data from the trial in the first half of 2019.

McCarthy said that Annamycin might be effective in leukemia patients that have developed resistance to first line anthracycline therapy, with reduced cardiotoxicity. Data from Phase 1/2 studies being conducted in U.S. and Europe are expected in the first half of 2019.

Regarding WP1122, he said the company is targeting cancer metabolism by starving it of glucose via a “glucose decoy designed to addict the cancer cell.” Data are preclinical but positive, with a Phase 1 study in brain cancer expected to begin in 2019.

“Ongoing and upcoming trials, followed by data readouts should demonstrate (if positive) proof-of-concept in these indications, providing catalysts for the stock and supporting a higher valuation,” Mr. McCarthy added.

Stephen Kilmer