Billionaire Steven Cohen Buys18 Aug 2020 16:34
Hoping to provide better therapies for patients with chronically debilitating and life-limiting rare diseases, Mereo Biopharma advances assets from other companies that were not progressed for strategic reasons to late-stage development. Based on its vast potential, some think that its $2.83 share price looks like a steal.
Cohen recently took the opportunity to get in on the action. Reflecting a new position, Point72 bought up 375,000 shares in Q2, with the value of the new holding landing at $1,148,000.
Writing for SVB Leerink, 5-star analyst Joseph Schwartz has high hopes for the company. Along with 2020 fundraising which removed the financial overhang and extended its cash runway into early 2022, he believes the news that etigilimab rejoined the development pipeline will “put this under-the-radar company on the map.”
Etigilimab, which was acquired during MREO's reverse merger with OncoMed back in April, generated encouraging results as both a monotherapy and combination in Phase 1a and Phase 1b, respectively. Based on this data, MREO moved the candidate into a larger Phase 1b trial, which is slated to kick off in Q4 2020. Due to recent developments with other anti-TIGIT programs, the company plans to evaluate multiple tumor types in the Phase 1b trial of etigilimab in combination with an anti-PD1/PDL1.
“We believe MREO’s more deliberate venture into oncology could pay off handsomely for the company: Not only can MREO leverage the previous work and expertise of OncoMed, but investors interested in anti-TIGIT assets could bring new eyes to MREO’s rare disease pipeline which we believe merits a deeper look by the Street,” Schwartz explained.
On top of this, MREO plans to initiate a Phase 3 pediatric study of lead asset setrusumab (anti-sclerostin) for osteogenesis imperfecta (OI) in 2H20, with COVID-19 not expected to cause any delays. Schwartz points out that MREO received positive feedback from a Type B End-of-Phase 2 meeting with the FDA, after encouraging data from setrusumab’s Phase 2b ASTEROID study in adults with OI was released. “While the Phase 3 pediatric study design had prior alignment from the EMA, last month’s announcement removed a significant unknown on the path towards a global pivotal trial for setrusumab,” the analyst noted.
To this end, Schwartz rates MREO an Outperform (i.e. Buy) along with an $8 price target. This target conveys his confidence in MREO’s ability to soar 182% higher in the next twelve months.
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