On Wednesday, H.C. Wainwright reaffirmed a Buy rating and a $123.00 price target on shares of XOMA Corporation (NASDAQ:XOMA). This endorsement follows the announcement made by XOMA's partner, Rezolute (NASDAQ:RZLT), regarding their drug candidate ersodetug (RZ358), which has recently been granted Breakthrough Therapy Designation (BTD) by the FDA for the treatment of congenital hyperinsulinism (CHI).
The FDA's BTD was awarded based on the promising results of the Phase 2b RIZE study. Anticipation is now building for the Phase 3 sunRIZE study, which is expected to deliver topline data in the second half of 2025. Ersodetug has also been recognized in Europe, having received PRIME Eligibility from the European Medicines Agency (EMA) for CHI in October 2023, and the Innovation Licensing and Access Pathway (ILAP) designation in the United Kingdom (TADAWUL:4280).
The RIZE study, whose findings were presented in May 2022 at the Pediatric Endocrine Society Annual Meeting, demonstrated a significant reduction in hypoglycemia events by approximately 75% at anticipated therapeutic doses. This included a greater than 50% improvement in hypoglycemia in all patients within the high-dose cohort, without any adverse drug events or clinically significant hyperglycemia. Additionally, the study showcased a predictable, dose-dependent response and exceeded expectations for correcting hypoglycemia across various metrics.
The upcoming Phase 3 sunRIZE study is designed as a global, multi-center, double-blind, randomized, controlled trial that aims to enroll 56 CHI patients over the age of 3 months who do not have adequate glycemic control with standard of care treatments. Its primary endpoint is to assess the change in the average number of hypoglycemia events per week over a six-month period.
If ersodetug is approved, XOMA stands to receive high-single to mid-teen percentage royalties. These potential earnings are seen as a significant addition to the company's growing royalty revenue. XOMA's projections for RZ358 include a potential market launch in 2027, with peak sales estimated at approximately $300 million. The addressable market in the U.S. is thought to consist of roughly 1,500 patients, encompassing both diazoxide-responsive and unresponsive individuals.
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