Leerink cuts scPharma to MP; PT to $5 from $12

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Leerink downgraded scPharmaceuticals (NASDAQ:SCPH) to “market perform” from “outperform” and slashed its price target to $5 from $12 after the company inked a deal to use West Pharmaceuticals’ SmartDose on-body drug delivery system with its Furoscix drug candidate as an outpatient alternative to treat edema in patients with heart failure. The stock closed at $4.06 on Jan. 29.

scPharma is focused on developing and commercializing products for the subcutaneous, self-administration of IV-strength treatments in heart failure and infectious disease.

Analyst Ami Fadia writes that the new West Pharma device that scPharma now plans to use for Furoscix will likely have a “smoother regulatory path given that this device (albeit with a smaller vial) is already approved by the FDA.”

However, she said scPharma would likely have to perform “additional development work yet to be agreed on with FDA, pushing out launch timelines potentially by another year.”

The new timelines also might put a financing overhang on the stock, as scPharma will most likely need to explore additional financing before a regulatory submission, she added.

In addition, “we do not see enough positive catalysts between now and an FDA submission to offset the risk of dilution from a potential capital raise,” Ms. Fadia said.

Stephen Kilmer