Leerink starts Millendo at OP; PT $24

watch-1074489952.jpg

Leerink Partners launched coverage of Millendo Therapeutics (NASDAQ:MLND) with an “outperform” rating and $24 price target. The stock closed at $9.64 on Dec. 12.

Millendo is developing treatments for rare, debilitating endocrine diseases. Its two drug candidates are livoletide for Prader-Willi Syndrome (PWS), and nevanimibe for congenital adrenal hyperplasia (CAH) and Cushing’s syndrome (CS).

Livoletide is an unacylated ghrelin (UAG) analogue with encouraging phase 2 subset data showing significant improvements in hyperphagia (insatiable hunger) in PWS. In a survey conducted by the Foundation for Prader-Willi Research (FPWR), patients/caregivers identified hyperphagia as their greatest concern, even among the numerous other symptoms associated with PWS. Millendo has an agreement with the FDA and EMA that hyperphagia improvements alone could support marketing approval.

“We are especially enthusiastic about livoletide, which is poised to enter a registrational Phase 2b/3 trial in 1Q19 with a potentially accelerated time to market given its large study size and agreement with the FDA,” said Leerink analyst Joseph Schwartz.

In addition to its efficacy, livoletide’s clean safety profile is critically important following the thromboembolic problems associated with Zafgen’s (NASDAQ:ZFGN) discontinued PWS candidate, beloranib.

The company’s other candidate, nevanimibe, is an adrenal-selective inhibitor of acetyl-CoA acetyltransferase 1 (ACAT1) that is in phase 2 development for CAH and CS. Nevanimibe inhibits the formation of cholesterol precursors that are required to produce three classes of steroids implicated in CAH: glucocorticoids, mineralocorticoids, and androgens. Although nevanimibe would not replace current therapy, it could be combined with glucocorticoid therapy to improve biochemical control in CAH. In CS, nevanimibe has the potential to lower cortisol levels.

Stephen Kilmer