Leerink ups Mirati Therapeutics OP; PT $20


Leering upgraded Mirati Therapeutics (NASDAQ:MRTX) to “outperform” from “market perform” and raised its price target to $20 from $15, after the company re-prioritized its pipeline programs. The stock closed at $15.50 on Nov. 13.

 “Specifically, investment in lead product candidate, glesatinib, is being de-prioritized (i.e. discontinued), while freed-up resources are being reallocated to the significantly more promising sitravatinib program as well as preclinical efforts to target K- Ras,” writes analyst Michael Schmidt.

“We've been critical of the glesatinib program in the past, which had been burning half of Mirati’s R&D budget, with limited odds of clinical and commercial success in c-Met+ non-small cell lung cancer (NSCLC), in our view,” he added.

Mr. Schmidt said that sitravatinib, on the other hand, is Mirati’s more potent next-generation kinase inhibitor (with long IP), which has recently generated very early, yet very promising Phase 1 clinical data in difficult-to-treat checkpoint inhibitor refractory NSCLC patients.

“These data, in our view, warrant expansion of this significantly more promising program and additional updates are expected in mid-2018,” he added.

In addition, discontinuation of the glesatinib program expands Mirati’s cash runway by one year, through the end of 2019, according to the company, removing a near-term financial overhang.