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Investing.com - Sagimet Biosciences Inc (NASDAQ:SGMT), currently trading at $7.77 with a market capitalization of $255 million, received a Buy rating initiation from Clear Street on Tuesday, with a price target of $29.00. According to InvestingPro data, analyst targets for the stock range from $25 to $33, suggesting significant upside potential.
The research firm cited the "highly attractive profile" of Sagimet’s once-daily oral denifanstat, describing it as an asset with "robust multi-modal biology akin to FGF21 analogs," which have recently driven significant merger and acquisition activity in the MASH space. With a beta of 3.27, InvestingPro data indicates the stock exhibits higher volatility than the broader market.
Clear Street highlighted denifanstat’s "exceptional P2b F2-F3 data" and "outstanding P3 acne results," along with development plans for F4C in combination with Madrigal Pharmaceuticals’ REZDIFFRA as key factors supporting the positive outlook.
The firm noted Sagimet’s solid cash position of $135.5 million, which provides runway into 2027, and upcoming readouts from ongoing Phase 1 trials as additional elements positioning the company as "a compelling growth story."
Clear Street’s $29 price target implies significant upside potential compared to Sagimet’s current enterprise value of $188 million, with the analyst using "conservative valuation metrics" comparable to Boston Pharma’s recent $1.2 billion upfront acquisition. The company maintains strong liquidity with a current ratio of 17.55, and according to InvestingPro’s analysis, holds more cash than debt on its balance sheet. Get access to 8 additional ProTips and comprehensive financial analysis with an InvestingPro subscription.
In other recent news, Sagimet Biosciences Inc. announced that its fatty acid synthase inhibitor, denifanstat, successfully met all primary and secondary endpoints in a Phase 3 clinical trial for moderate to severe acne vulgaris. The trial, conducted by Ascletis Bioscience in China, involved 480 patients and demonstrated significant improvements compared to a placebo. Additionally, Sagimet Biosciences has appointed KPMG LLP as its new independent auditor, replacing Deloitte & Touche LLP. The change in auditors follows Deloitte’s unmodified audit reports for the previous two fiscal years.
Sagimet Biosciences also entered into a $75 million at-the-market sales agreement with Leerink Partners LLC, allowing the company to sell its Series A common stock through ATM offerings. Leerink Partners will serve as the sales agent, earning a commission on sales, while Sagimet Biosciences retains the flexibility to manage the sale of shares. Furthermore, Wedbush initiated coverage on Sagimet Biosciences with an Outperform rating, highlighting the company’s development of oral fatty acid synthase inhibitors for treating metabolic dysfunction-associated steatohepatitis and acne. These recent developments reflect Sagimet Biosciences’ ongoing strategic and financial activities.
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