Canaccord Genuity (TSX:CF, LSE:CF) analysts initiated coverage of DICE Therapeutics, a biopharmaceutical company focused on treating chronic autoimmune and inflammatory diseases, on Monday with a ‘Buy’ rating and a 12-month target price of $71 per share, noting the company’s lead compound DC-806 for treating plaque psoriasis (PsO) has “blockbuster potential.”
This price target is more than double the company's current share price as of Tuesday afternoon of $34.17.
The analysts wrote that they believe DICE is poised for clinical success, given the company’s R&D strategy of selecting drug targets that are: 1) proven to be effective for indications with high prevalence; 2) clinically and commercially validated by approved biologics; and 3) known to have structural features that support potent small molecule binding.
They point to the current commercial market size for PsO as affecting more than 125 million people globally, with a worldwide therapeutic market of about $24 billion in 2022 that is projected to reach $50 billion by 2029.
“We estimate DC-806 to launch in 2028 in the US, with peak sales of about $1.4 billion in 2032, the out-year of our model,” the analysts said.
DICE’s DC-806 is not just an IL-17 pathway inhibitor but an ORAL IL-17 inhibitor, they contend, which has been validated as one of the most effective treatment options available to date for treating PsO.
“DICE reported positive proof-of-concept data in 4Q22 from a Phase I study of DC-806 in both healthy volunteers and PsO patients, which demonstrated promising early efficacy as well as a favorable safety profile,” they added.
DC-806 is currently in Phase IIb development with data expected in the third quarter of 2024.
As well, the Canaccord analysts stated that DICE is also developing oral integrin inhibitors for the treatment of inflammatory bowel disease and fibrotic diseases, with the plan to nominate a development candidate in the second half of 2023.
DICE Therapeutics reported that it has cash and cash equivalents of $554.5 million as of March 31, 2023, which company management believes is sufficient to fund operations into 2026 and through multiple expected clinical milestones.
Contact Sean at sean@proactiveinvestors.com