Kintara Therapeutics Inc (NASDAQ:KTRA) shares jumped higher after analysts at Maxim Group upped their price target for the drug developer to $6 from $3 and reiterated a Buy rating in a note to clients.
The New York City-based investment bank pointed to the recent launch of the GBM AGILE (Glioblastoma Adaptive Global Innovative Learning Environment) trial, which includes Kintara’s drug VAL-083, as a key catalyst.
Two other drug-makers will participate in the 800-patient study, also called the GCAR Adaptive Study, which will split patients into three arms. VAL-083 is the only therapy that will be evaluated in all three arms, the firm noted. Currently, 34 sites are up and running, with a total of 40 expected by the end of the first quarter.
Kintara stock was up 7% on Tuesday morning to $2.19.
READ: Dawson James issues Buy rating on Kintara Therapeutics as its VAL-083 selected for study to treat three major brain cancers
“This is a milestone for Kintara as it ushers in the company's transformation toward a pivotal-stage company,” Maxim's analysts wrote. “Our view is that the 'blocking and tackling' by management since taking the reins in mid-2018 is starting to materialize, and this is being reflected with renewed interest in KTRA shares. That said, at a market capitalization of ~$45 million, success of either drug is still not priced into shares, in our view.”
Kintara is also undervalued relative to its peers in the GBM space, the analysts noted. Medicenna Therapeutics Corp (TSE:MDNA) (NASDAQ:MDNA) and Kazia Therapeutics Limited (ASX:KZA) (NASDAQ:KZIA) have market caps of ~$210 million and ~$130 million, respectively, despite being at a similar stage of development.
VAL-083 is considered a first-in-class, DNA-targeting small molecule, mechanisms of action (MOA) in addendum, which is designed to cross the blood-brain barrier. It has demonstrated clinical activity against a range of cancers, including the central nervous system, ovarian, and other solid tumors in clinical trials sponsored by the US National Cancer Institute.
VAL-083 has been granted Orphan Drug Designation for GBM by the US Food & Drug Administration (FDA) and the European Medicines Agency (EMA) and has also been granted Orphan Drug Designations for medulloblastoma and ovarian cancer from the FDA. As well, the FDA has granted Fast Track Designation for VAL-083 in recurrent GBM.
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