HCW starts Albireo Pharma at buy: PT $62


H.C. Wainwright launched coverage of Albireo Pharma (NASDAQ:ALBO) with a “buy” rating and $27 price target. The stock closed at $26.80 on Feb. 27.

Albireo is focused on rare pediatric and adult cholestatic diseases, with two bile acid modulators: odevixibat and elobixibat. The company also is developing A3384, oral formulation of cholestyramine, a bile acid sequestrant, or resin, for the treatment of bile acid malabsorption.

Analyst Ed Arce writes that the company is an emerging leader in the treatment of cholestatic diseases of the liver, beginning with lead drug, odevixibat, a first-in-class ileal bile acid transporter inhibitor, currently in a single Phase 3 study (PEDFIC1) in children aged six months to 18 years, with progressive familial intrahepatic cholestasis (PFIC Type 1 and 2).

PFIC is an ultra orphan disease that begins in infancy, progresses to cirrhosis and is lethal in childhood unless treated. There are no approved drugs for PFIC, and many patients do not respond to/or tolerate off-label ursodeoxycholic acid (UDCA). The only other options currently are surgical biliary diversion, which requires life-long stoma bag, or liver transplant.

In a four-week, dose-escalating Phase 2 study of odevixibat, 11 PFIC patients with a mean age of 6 1/2 years experienced a mean reduction in serum bile acid (sBA) levels of 71% from baseline, even while most were on a background of UDCA and/or rifampin, Mr. Arce said.

In addition, most patients in the short Phase 2 study also experienced improvements in pruritus and sleep disturbance. “We believe that by interrupting the enterohepatic circulation, odevixibat decreases the bile acid pool and thereby also improves pruritus,” he added.

According to Mr. Arce, the main near-term stock catalyst is top-line data from the PEDFIC1 trial, which is expected in late 2019 or early 2020. The primary endpoint for the FDA and EMA evaluation will be change in pruritus and sBA responder rate, respectively.

Stephen Kilmer