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On Tuesday, H.C. Wainwright adjusted its price target for Avidity Biosciences (NASDAQ:RNA), reducing it to $68 from the previous target of $72, while maintaining a Buy rating on the stock. Currently trading at $29.33, the company has seen an impressive 11.7% gain over the past week. According to InvestingPro data, analyst targets range from $48 to $96, with a strong Buy consensus rating. The firm’s decision comes as Avidity Biosciences nears the release of topline data from the FORTITUDE trial’s dose escalation phase.
Avidity Biosciences is currently preparing to disclose key findings that might assist in aligning the global Phase 3 trial with FDA regulatory standards. The company maintains a strong financial position, with InvestingPro analysis showing more cash than debt on its balance sheet and a healthy current ratio of 16.9x. The potential for accelerated approval is buoyed by a strong genetic connection to the disease through abnormal DUX4 gene expression. Avidity has shown that reducing DUX4 expression can lead to a significant decrease in DUX4-related gene signatures, as evidenced by three different gene signature panels.
Furthermore, the company has reported a reduction in creatine kinase, a biomarker typically elevated in damaged muscles, which correlates with functional endpoints. Treatment with 2 mg/kg of Del-brax resulted in a 53% reduction in DUX4-related gene expression. This outcome aligns with the ReDUX4 panel and 41 gene panels, underpinning the drug’s mechanism of action.
The FORTITUDE trial also indicated potential improvements in clinical endpoints such as the RWS, total composite score, shoulder abductor strength, and ankle dorsiflexion compared to a placebo group. Notably, the RWS, a critical clinical endpoint, showed improvements not just over placebo but also relative to a natural history cohort, bolstering confidence in the program.
H.C. Wainwright anticipates that the upcoming dose escalation data will confirm a 50% or greater reduction in DUX4-related gene expression, supporting the drug’s mechanism of action. While dose-dependent reduction in gene expression would be ideal, the absence of such effects might suggest that the 2 mg/kg dosage is already near saturation levels. Nevertheless, continued improvements in clinical endpoints could provide promising signs for the next stages of the program.
The revised price target of $68 reflects a reevaluation of the company’s operational expense assumptions amid the progress of its pipeline. With a market capitalization of $3.5 billion and trading near its Fair Value according to InvestingPro analysis, investors should note that seven analysts have recently revised their earnings expectations upward for the upcoming period. For deeper insights into Avidity’s financial health and growth prospects, including 8 additional ProTips and comprehensive valuation metrics, explore the full Pro Research Report available on InvestingPro.
In other recent news, Avidity Biosciences has announced a change in its independent registered public accounting firm, appointing Deloitte & Touche LLP as the new auditor for the fiscal year ending December 31, 2025. This follows a competitive selection process and the dismissal of the previous auditor, BDO USA, P.C., which had issued an adverse opinion on the company’s internal control over financial reporting for the fiscal year 2023 due to a material weakness. However, this issue has since been resolved, and BDO issued an unqualified opinion for 2024. In regulatory developments, the Japan Ministry of Health, Labour and Welfare granted Orphan Drug designation to Avidity’s investigational treatment for myotonic dystrophy type 1, del-desiran, which is also recognized in the U.S. and Europe. Meanwhile, Cantor Fitzgerald maintained its Overweight rating on Avidity Biosciences, with a price target of $96, as the company progresses with its Phase 3 trial for del-brax. Citi reiterated a Buy rating with a $70 target, following positive results from the phase 1/2 EXPLORE44 trial for del-zota, showing significant exon skipping and dystrophin production. H.C. Wainwright also reaffirmed a Buy rating with a $72 target, citing promising trial data for del-zota, which demonstrated a significant increase in dystrophin levels and a clean safety profile.
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