Roth starts Oryzon Genomics at buy; PT €15

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Roth Capital Partners initiated coverage of Oryzon Genomics (ISIN Code: ES0167733015, ORY) with a “buy” rating and price target of €15. The stock was recently quoted at €2.38.

“In our view, the Spanish biotech Oryzon is the most diversified epigenetics play in the public market,” writes analyst Jotin Marango.

“We believe that the key to realizing the therapeutic potential of epigenetics is diversification outside of late-stage oncology and into indications where the disease can be reprogrammed via chronic treatment,” he added.

As a result, he recommends Oryzon not only as a “fundamental play in epigenetics, but also as a near-to-medium term value play when considering its relatively low profile on the Madrid Exchange, despite its wide clinical pipeline (AML, SCLC, AD, MS).”

Regarding the company’s oncology program, Mr. Jotin said Oryzon’s therapeutic target, the lysine-specific demethylase 1, (LSD1), has one of the widest publication footprints in epigenetics. “Yet, in our view Big Pharma is still incapable of appreciating epigenetic agents, and the recent return of the LSD1 inhibitor, ORY-1001, from Roche to Oryzon may be the best thing to happen to this agent.”

Regarding its neuro program, he sees good rationale for an epigenetic approach to neurotherapeutics, especially in Alzheimer’s disease (AD), supported by basic science, clinical findings, and recent investment. Unlike older epigenetic agents, Oryzon's ORY-2001 (LSD1/MAO-B inhibitor) is brain-penetrant and with a clean safety record in a 106-patient Phase 1 trial.

He said the company’s two Phase 2 studies are ongoing: a 26-week 90-patient study in mild/moderate AD, and a 36-week 24-patient study in multiple sclerosis. “We believe that any positive preliminary findings from either study in the first quarter of 2019 would be transformational to Oryzon’s value,” Mr. Jotin added.

Stephen Kilmer