Stifel starts Principia Biopharma at buy; PT $45

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Stifel initiated coverage of Principia Biopharma (NASDAQ:PRNB) with a “buy” rating and $45 price target. The stock closed at $27.81 on April 15.

“We are bullish on Principia shares ahead of a catalyst rich fourth quarter of 2019, when we expect lead asset, PRN1008, a BTK inhibitor, to become further de-risked in two beachhead autoimmune/inflammatory conditions: pemphigus vulgaris (PV) and immune thrombocytopenia purpura (ITP),” writes analyst Derek Archila.

PV is a disease that causes blisters and sores on the skin or mucous membranes, such as in the mouth or on the genitals. ITP is a clinical syndrome in which a decreased number of circulating platelets lead to a bleeding tendency, easy bruising, or extravasation of blood from capillaries into skin and mucous membranes.

“We don't think the Street fully appreciates the nuances of PRN1008's molecular design, which we believe will allow for improved safety and efficacy in autoimmune/inflammatory conditions, something that has hindered previous attempts with other BTKi's,” Mr. Archila said.

PRN1008's data to date already suggests an improved safety profile and “we believe established proof-of-concept data in its two beachhead indications offer a favorable risk/reward (+85%/-25%) at current levels and should provide read through for other B-cell mediated autoimmune conditions where BTK plays a role offering even more upside,” he added.

In addition, he said Principia’s PRN2246, which is partnered with Sanofi and is being developed for multiple sclerosis, is mechanistically de-risked ahead of an important Phase 2 readout in the first half of 2020.

Abby Hardy