Arecor Therapeutics PLC (AIM:AREC) shares were in demand on Thursday, thanks to an FDA approval, and stockbroker Panmure Liberum has repeated a ‘buy’ recommendation.
Today’s news from the FDA is “the most positive outcome Arecor could have achieved”, the broker highlighted in a note.
The company this morning announced that it had received positive guidance from the US Food and Drug Administration on its planned Phase 2 clinical study for AT278, an ultra-concentrated and ultra-rapid insulin candidate.
The trial will assess AT278 delivered via an Automated Insulin Delivery system in people with type 1 and type 2 diabetes. It will compare AT278 with NovoLog in fewer than 100 participants in the US.
It confirmed that HbA1c (a longer-term blood sugar test) measurements are not required for the Phase II trial.
The FDA endorsed the use of “time-in-range” as the primary efficacy endpoint, allowing data to be generated in six weeks compared with a minimum of twelve weeks for traditional HbA1c measures, the company noted.
“We expect the clarification of the trial design to enable Arecor to move forward with its partnering strategy as it now has certainty on the timescale and cost of the trial,” Panmure Liberum analyst Julie Simmonds said in a note.
“The validation provided by a partnership should then enable Arecor to extend its cash runway, providing funds to move forward its broader pipeline. Interim results are expected later this month.”
With its ‘buy’ recommendation, the broker pitches a 245p price target, suggesting substantial upside to the current market price of around 71p.
A new frontier for diabetes
Arecor chief executive Sarah Howell, in Thursday’s statement, said: "We are aiming to establish a new frontier for the treatment of diabetes, and to bring more accessible next-generation treatment options that simplify care and improve outcomes for people living with diabetes.”
She added: "Such positive and constructive feedback from the FDA for our first-of-a-kind insulin and AID system combination study represents a significant milestone in our drug development program.
"We believe we will generate crucial data towards demonstrating the economic value of AT278 in combination with an innovative AID system."
It also intends to submit an investigational new drug application in 2026.
Arecor shares, in London, gained 4.3p or 6.5% changing hands at 71.33p.