Leerink ups resTORbio PT to $45 from $35

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Leerink raised its price target for resTORbio (NASDAQ:TORC) to $45 from $35 after the company announced positive top-line results from its Phase 2b clinical trial of RTB101. The stock finished at $13.47 on July 25.

The Phase 2b study was designed to prevent laboratory confirmed respiratory tract infections (RTIs) in individuals aged 65 and older, with risk factors for such infections, and in individuals over 85 year olds. 

“This exploratory trial defied its many sceptics by showing a statistically significant reduction in all RTIs in the optimal dose arm on the primary endpoint,” writes analyst Geoffrey Porges.

In addition, he said the optimal dose showed a much higher reduction in the risk of infection in individuals with asthma, and in the rate of infections in the very elderly. And the drug showed no or even slightly negative effects in patients who were active smokers or had chronic obstructive pulmonary disease (COPD), and the impact of the activity in these patients diluted the positive effects in non-smokers and non-COPD patients in the overall cohorts. 

“We believe this trial provided solid confirmation of the signal seen in the prior studies, and it positions the company well to design and conduct a pivotal trial in the highest risk subpopulations,” Mr. Porges added. 

Based on the trial result, Mr. Porges increased the probability of success for RTB101 to 35% from 30%. “We have previously commented on how sensitive our price target for resTORbio is to changes in our probability of success, and “there is no doubt that this trial result is a de-risking event for this program (safety events were unremarkable).”

Sydney Stewart