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On Tuesday, H.C. Wainwright reaffirmed its Buy rating and $68.00 price target for Avidity Biosciences (NASDAQ:RNA), focusing on the potential of the company’s surrogate endpoint, cDUX, to accelerate the approval process for its drug candidate, del-brax. Currently trading at $32.66, the stock has shown strong momentum with a 20% return over the past year. According to InvestingPro data, analyst targets range from $54 to $96, with 7 analysts recently revising their earnings expectations upward for the upcoming period. The firm’s analyst highlighted the significance of identifying a robust and reliable biomarker, which has been a key factor in the development of disease-modifying drugs across the biotech industry in recent years.
The analyst noted that the U.S. Food and Drug Administration’s (FDA) increasing recognition of surrogate biomarkers, such as Abeta PET for Alzheimer’s disease and NfL for ALS, is a positive sign for Avidity’s cDUX4. The firm believes that the FDA’s acceptance of similar biomarkers in other diseases bodes well for cDUX4’s potential in facilitating accelerated approval for del-brax, a drug aimed at treating Facioscapulohumeral Muscular Dystrophy (FSHD).
Support for cDUX as a surrogate biomarker comes from several factors, including the pressing need for a disease-preventing drug for FSHD, which underscores the importance of such a biomarker for drug developers. Preclinical studies, natural history studies, and data from the FORTITUDE trial all point to the strength of cDUX (KHDC1L) as a potential surrogate biomarker.
The analyst also referenced research that identified KHDC1L as part of a signature set of genes significantly upregulated in FSHD muscle biopsies, which are responsive to DUX4 targets. This finding, published in BioRxiv in 2023, established the RNA expression levels of KHDC1L and other DUX4-regulated genes as effective differentiators between FSHD samples and control samples, thus establishing their potential as candidate biomarkers for the disease. The company’s strong financial position, with more cash than debt and a healthy current ratio of 16.91, provides substantial runway for continued research and development. InvestingPro analysis reveals 10+ additional key financial metrics and insights available to subscribers.
Additionally, KHDC1L has been consistently described in scientific literature as one of the most reliable targets in muscle cells affected by FSHD. Its strong association with whole-muscle fat infiltration and STIR signal alterations supports a whole-muscle model of disease progression in FSHD, which is considered the gold standard by key opinion leaders (KOLs).
In conclusion, H.C. Wainwright’s analyst reiterated the Buy rating and $68 price target for Avidity Biosciences, expressing confidence in the potential of cDUX to serve as a surrogate biomarker and accelerate the approval of del-brax. With a market capitalization of $3.94 billion and a beta of 0.95, the company shows relatively moderate market sensitivity. For a deeper understanding of Avidity Biosciences’ financial health and growth potential, investors can access the comprehensive Pro Research Report available on InvestingPro, which provides detailed analysis of over 1,400 US stocks.
In other recent news, Avidity Biosciences has announced positive topline data from its Phase 1/2 FORTITUDE trial for its investigational therapy, del-brax, aimed at treating Facioscapulohumeral Muscular Dystrophy (FSHD). The therapy demonstrated improvements in function and muscle strength, with plans underway for a Phase 3 FORWARD study to confirm these findings. The company has received feedback from the FDA on pursuing an accelerated approval pathway, aligning with its strategy to bring del-brax to market. BofA Securities analyst Tazeen Ahmad has responded by raising the price target for Avidity Biosciences to $54, maintaining a Buy rating. Meanwhile, H.C. Wainwright has adjusted its price target to $68, reflecting a reassessment of operational expenses amid the drug’s development progress. In a separate development, Avidity Biosciences has appointed Deloitte & Touche LLP as its new auditor, following a competitive selection process. This change follows the dismissal of BDO USA, P.C., and aims to uphold high standards in financial reporting. The company has addressed a previously disclosed material weakness in its internal controls, receiving an unqualified opinion on its financial reporting for 2024.
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