Sagimet Biosciences keeps stock target with Buy rating on phase 3 program

On Monday, H.C. Wainwright affirmed its Buy rating and $32.00 stock price target for Sagimet Biosciences Inc (NASDAQ:SGMT), following the company's announcement regarding its Phase 3 MASH program for denifanstat. The program is slated to commence by the end of 2024 and is designed in accordance with guidance from the FDA.

Sagimet Biosciences disclosed on November 14 that the Phase 3 program for denifanstat would involve at least 1,800 patients across two major trials. The first, FASCINATE-3, is a pivotal study for non-cirrhotic MASH patients, aiming to enroll 1,260 individuals to measure the efficacy and safety of denifanstat over a 52-week period.

The outcomes from this trial are anticipated to underpin the drug's accelerated approval in both the U.S. and the EU. Furthermore, patients in this trial may continue treatment for up to 4.5 years to assess long-term clinical results, which will contribute to the drug's full approval for F2-F3 MASH patients.

The second study, FASCINIT, is a long-term safety study expected to include at least 540 patients. This trial will help meet the minimum safety database requirements for denifanstat and will likely include some participants who did not qualify for the FASCINATE-3 trial.

Non-invasive tests and biomarkers will be used in both studies for patient screening and to evaluate secondary efficacy endpoints after one year of treatment, with no end-of-treatment liver biopsy required in the FASCINIT study.

The positive outlook for denifanstat is bolstered by the promising data from the Phase 2b FASCINATE-2 study. H.C. Wainwright's analyst expressed confidence in the potential for denifanstat's Phase 3 success to facilitate its first-pass approval for treating F2-F3 MASH. The firm's position remains optimistic, as reflected in the reiterated Buy rating and price target for Sagimet Biosciences.

In other recent news, Sagimet Biosciences has experienced several significant developments. The company's drug candidate, denifisant, has shown promise in Phase 2b trials, indicating potential benefits for patients with metabolic-dysfunction associated steatohepatitis (MASH).

UBS initiated coverage on Sagimet, assigning a Buy rating, while Leerink Partners maintained their Outperform rating. However, Goldman Sachs downgraded Sagimet from "Buy" to "Neutral."

Sagimet also reported positive Phase 2b FASCINATE-2 trial results, demonstrating significant improvements in disease activity, MASH resolution, and fibrosis in patients. The company plans to advance denifanstat into Phase 3 development in 2024. UBS estimates that denifisant could reach a peak risk-adjusted opportunity of approximately $746 million in the MASH market.

Sagimet initiated a $75 million equity offering in partnership with Cantor Fitzgerald & Co. and expanded its board of directors, appointing Jennifer Jarrett and Dr. Anne Phillips as new members. These are recent developments in Sagimet's ongoing efforts to advance its pharmaceutical programs.

InvestingPro Insights

As Sagimet Biosciences Inc (NASDAQ:SGMT) gears up for its Phase 3 MASH program for denifanstat, InvestingPro data offers additional context to the company's financial position. Despite the positive outlook from H.C. Wainwright, it's worth noting that Sagimet's market capitalization stands at $150.95 million, reflecting its current scale as a biopharmaceutical company in the development stage.

InvestingPro Tips highlight that Sagimet holds more cash than debt on its balance sheet, which could be crucial for funding the extensive Phase 3 trials outlined in the article. This financial stability is particularly important given that the company is not currently profitable, as indicated by another InvestingPro Tip.

The stock's recent performance has been mixed, with a strong 72% return over the last three months, but a 19.15% decline in the past week. This volatility may reflect investor reactions to the company's announcements and the broader market's assessment of Sagimet's prospects as it approaches this critical phase of drug development.

For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips that could provide deeper insights into Sagimet's financial health and market position.

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