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JMP Securities reiterated its Market Outperform rating and $31.00 price target on Sagimet Biosciences Inc (NASDAQ:SGMT), currently trading at $7.40, following positive Phase 3 acne data from the company’s Chinese partner Ascletis. According to InvestingPro data, analysts maintain a strong bullish consensus with price targets ranging from $5 to $67, suggesting significant upside potential. The data for denifanstat, announced earlier this month, showed statistically significant improvement on all primary and secondary endpoints with results that outperformed other common acne treatments.
The 480-patient trial demonstrated no serious adverse events or new safety signals, and importantly, no hair thinning was observed in patients receiving the drug. Expert dermatologist Dr. Bhatia noted that the Chinese Phase 3 trial’s design and patient population were similar to pivotal trials of approved agents and aligned with FDA requirements.
Acne represents a substantial market opportunity, affecting approximately 50 million U.S. individuals, with moderate to severe cases accounting for 70% of the 5.1 million U.S. acne patients treated by dermatologists annually. With a market capitalization of $238.25 million and a remarkably strong current ratio of 20.34, InvestingPro analysis shows Sagimet maintains a solid financial foundation to pursue this opportunity. Get access to the complete financial health analysis and 12 additional ProTips with an InvestingPro subscription. Under their partnership agreement, Ascletis holds exclusive Chinese rights to develop and commercialize Sagimet’s FASN inhibitors, while Sagimet is eligible to receive up to $122 million in development and commercial milestones.
Sagimet will also receive high-single to mid-teens-percentage tiered royalties on net sales. JMP considers all downstream economics as potential upside to their valuation, noting that the Phase 3 data provide a strong foundation for Sagimet’s next-generation FASN inhibitor TVB-3567, which began Phase 1 testing this month.
The Phase 1 trial will include a cohort of patients with acne, potentially derisking the program ahead of a larger Phase 2 study planned for 2026. JMP considers TVB-3567 as upside to their valuation, with Sagimet referencing Accutane’s $1 billion-plus sales and Solodyn’s $700-800 million as potential comparables for effective acne treatment. InvestingPro data reveals the stock has delivered an impressive 24.58% return in the past week alone. Dive deeper into Sagimet’s potential with InvestingPro’s comprehensive research report, offering expert analysis and key metrics that matter most to investors.
In other recent news, Sagimet Biosciences Inc. announced positive results from a Phase 3 clinical trial of its acne treatment, denifanstat, conducted by its partner Ascletis in China. The trial demonstrated significant efficacy in treating moderate to severe acne, meeting all primary and secondary endpoints. This development has reinforced investor confidence and highlighted the therapeutic potential of FASN inhibition. On the financial front, Leerink Partners reiterated its Outperform rating for Sagimet, maintaining a price target of $26.00. The firm cited the positive trial results and the potential for denifanstat in treating acne and NASH as key factors. Additionally, Sagimet updated its executive compensation agreements, enhancing severance terms for key officers in the event of a qualifying termination. The company also announced board changes, with Dr. Merdad Parsey deciding not to seek re-election. Sagimet’s stockholders elected Elizabeth Grammer (ETR:GMMG) and Beth Seidenberg, M.D., as Class II directors and ratified Deloitte & Touche LLP as the independent auditor for fiscal year 2025.
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