HCW starts Synthorx at buy; PT $30

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H.C. Wainwright initiated coverage of Synthorx (NASDAQ:THOR) with a “buy” rating and $30 price target. The stock closed at $17.38 on Dec. 31.

Synthorx’s Expanded Genetic Alphabet (EGA) technology generates a modular platform for engineering cytokines, with the ability to manipulate the innate biological interaction of cytokines and adapt them to applications either in oncology or autoimmune diseases.

The company’s lead program is THOR-707. “By site-specifically conjugating a single polyethylene glycol (PEG) chain to the master T-cell regulator, interleukin-2 (IL-2), Synthorx can alter interactions with IL-2 receptors on T-cells to drive the proliferation of effector T-cells without enhancing the propagation of regulatory T-cells,” writes analyst Debjit Chattopadhyay.

He said THOR-707 is conjugated to a single PEG chain that offers superior target occupancy; is active 100% of the time; and is not a prodrug, nor targeted to any specific tumor type.

“Our expectations of enhanced activity and higher therapeutic index [of] THOR-707 stems from its differentiated pharmacodynamic (PD) profile that translates in higher peak expansion of lymphocytes, without a concomitant expansion of eosinophils or the binding of THOR-707 to functional IL-2Rs on lung endothelial cells,” he added. “Taken together, these could translate into a higher therapeutic window and superior anti-PD-1s synergies [compared with] peer sponsored efforts.”

THOR-707 is expected to enter the clinic during the second half of 2019, with proof-of-concept data during the first half of 2020, and multiple other programs to follow, Mr. Chattopadhyay said.

Stephen Kilmer