SVB Leerink cuts InflaRx to MP from OP; PT to $4 from $67

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SVB Leerink downgraded German drug maker InflaRx (NASDAQ:IFRX) to “market perform” from “outperform” and slashed its price target to $4 from $67 after its lead drug failed to benefit patients with a debilitating skin disease in a clinical trial.

In late afternoon trading on May 5, shares of InflaRx were quoted at $3.23, down 91%, in heavy turnover.

In a Phase 2 clinical trial, InflaRx tested four escalating doses of its injectable antibody drug, IFX-1, against a placebo in 179 patients with hidradenitis suppurativa, a painful skin disease characterized by inflamed hair follicles, mostly found in the armpits and groin. Involvement of the sweat glands within the follicles causes painful, pus-filled boils, nodules, and abscesses.

After 16 weeks of treatment, there was no statistically significant improvement in skin responses between any of the IFX-1 doses and placebo.

“Although other indications, such as ANCA-associated vasculitis may provide a better shot on goal for anti-C5a inhibition, we believe investors will question the mechanism and the stock will be dead money until data from other studies proves the mechanism can be worthwhile,” writes analyst Joseph Schwartz.

The company expects three-month open-label extension study data should be available in the coming weeks, along with additional analyses of the SHINE Phase 2 study.

“Unfortunately, we do not see any reason why additional analyses of this trial or its extension study will look sufficiently better and management already sees no reason to advance into Phase 3,” he added.

Stephen Kilmer