MetaVia shares debut with Buy rating as DA-1726 shows preclinical weight-loss results

On Monday, H.C. Wainwright analysts initiated coverage on MetaVia (NASDAQ:MTVA), a biopharmaceutical company with a market capitalization of $15.16 million, with a Buy rating and a price target of $12.00.

According to InvestingPro data, the stock has shown resilience with a 7.98% gain over the past week, despite broader market volatility. The firm expressed interest in the company's drug candidate DA-1726, highlighting its potential in the treatment of metabolic disorders.

DA-1726 is an innovative oxyntomodulin (OXM) analogue, acting as a dual agonist for the glucagon-like peptide-1 (GLP-1) and glucagon (GCG) receptors. This drug is designed to be administered weekly through a subcutaneous injection.

While the company maintains a strong liquidity position with a current ratio of 2.41 and minimal debt, InvestingPro analysis indicates the company is currently burning through cash as it advances its development programs. It aims to reduce appetite, enhance insulin secretion, and increase energy expenditure by simultaneously activating the GLP-1 and GCG receptors.

In the body, insulin is released by pancreatic beta cells after eating to help cells absorb glucose and lower blood sugar levels. During periods of fasting, pancreatic alpha cells secrete GCG to stimulate glucose production. GLP-1 and GCG have various functions, including slowing gastric emptying, increasing thermogenesis in brown adipose tissue, and reducing blood glucose levels.

DA-1726 has shown promising results in preclinical studies when compared to tirzepatide, a similar dual agonist. The drug demonstrated comparable weight loss and improvements in significant metabolic parameters such as glucose levels, triglycerides, and cholesterol. Additionally, DA-1726 outperformed survodutide, another dual agonist, in terms of weight reduction and food consumption in preclinical animal studies.

The safety, tolerability, and pharmacokinetics of DA-1726 have been confirmed in the first part of an ongoing Phase 1 study involving obese but otherwise healthy adults. The second part of the study, expected to report results in the first quarter of 2025, is eagerly anticipated by H.C. Wainwright.

Analyst consensus remains bullish, with price targets ranging from $10 to $23, suggesting significant upside potential from current levels. The analysts are particularly interested in the 4-week weight loss exploratory endpoint, viewing the 5.8% placebo-adjusted mean weight loss at Week 6 from a Phase 1 study of survodutide as a preliminary benchmark for DA-1726's potential, despite the latter having a longer treatment duration.

In other recent news, MetaVia Inc. has reported favorable outcomes from its Phase 2a clinical trial of DA-1241, a treatment for metabolic dysfunction-associated steatohepatitis (MASH). The trial demonstrated significant reductions in alanine transaminase levels and improvements in secondary endpoints, indicating potential benefits in liver health and glucose control. The company anticipates an end of Phase 2 meeting with the FDA in the first half of 2025.

MetaVia, formerly known as NeuroBo Pharmaceuticals (NASDAQ:MTVA), underwent a strategic realignment and rebranding, reflecting its focus on developing therapies for cardiometabolic diseases. The company is also developing DA-1726, a potential treatment for obesity, and has reported positive preliminary data from the first part of its Phase 1 clinical trial of this drug. Maxim Group has initiated coverage on MetaVia shares, assigning a Buy rating, citing the development of both DA-1726 and DA-1241.

MetaVia has also secured $20 million through a private placement and registered direct offering, with the potential for an additional $50 million upon the full exercise of associated warrants. These are among the recent developments from the company, which continues to investigate the efficacy of DA-1241 and DA-1726 for MASH and type 2 diabetes, respectively.

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