Piper Sandler maintains target on Edgewise Therapeutics stock

Piper Sandler has maintained a confident stance on Edgewise Therapeutics (NASDAQ: EWTX), reiterating an Overweight rating with a $48.00 price target.

The firm's optimism is tied to several upcoming milestones for the biotechnology company, which focuses on developing therapies for severe, rare muscle disorders.

The company is gearing up for a significant second half of 2024, with expectations set for the Phase 1 single ascending dose/multiple ascending dose (SAD/MAD) trials in healthy volunteers (HVs) for its drug candidate EDG-7500.

Results are anticipated in September and are aimed at demonstrating a roughly 50% reduction in left ventricular outflow tract gradient (LVOT-G) with less than a 5% drop in left ventricular ejection fraction (LVEF) in patients with obstructive hypertrophic cardiomyopathy (oHCM).

These benchmarks are set to prove the drug's efficacy on par with existing treatment mavacamten, but with an improved safety and tolerability profile that may negate the need for a Risk Evaluation and Mitigation Strategy (REMS).

Edgewise Therapeutics is also preparing for a series of data readouts by the end of 2024 from its sevasemten programs in Phase 2 trials, including CANYON for Becker muscular dystrophy (BMD), LYNX and FOX, both for Duchenne muscular dystrophy (DMD).

The company has emphasized a low risk of negative outcomes for the CANYON trial's topline data, given that the pivotal Phase 2 GRAND CANYON cohort for BMD is actively enrolling participants.

Piper Sandler's bullish view is further supported by Edgewise Therapeutics' strong financial position, with the company reporting $511.8 million in cash reserves at the end of the quarter.

Meanwhile, Edgewise Therapeutics continues to make significant progress in its drug development programs. The biopharmaceutical company's lead drug, sevasemten, has shown promising results in clinical trials for Becker Muscular Dystrophy (BMD) and Duchenne Muscular Dystrophy (DMD).

Moreover, the company announced the addition of Arlene Morris, an experienced executive, to its Board of Directors. This comes at a time when Edgewise is advancing its pipeline of novel therapeutics.

InvestingPro Insights

In alignment with Piper Sandler's positive outlook on Edgewise Therapeutics, certain metrics from InvestingPro paint an informative picture for investors considering EWTX. With a market capitalization of $1.54 billion, Edgewise stands out for holding more cash than debt on its balance sheet, a sign of financial prudence that may reassure investors of the company's stability. Despite facing challenges such as weak gross profit margins and not being profitable over the last twelve months, Edgewise Therapeutics has managed a high return over the last year, with a 145.16% price total return, showcasing significant investor confidence.

An InvestingPro Tip that investors may find particularly relevant is that analysts do not anticipate the company will be profitable this year, which could temper expectations despite the company's strong financial position. Moreover, with two analysts having revised their earnings downwards for the upcoming period, it suggests that the market may be recalibrating its expectations for Edgewise's financial performance. For investors seeking a deeper dive into the company's prospects, InvestingPro offers additional tips, with a total of 9 tips available, providing a more comprehensive analysis.

Investors may also note that the InvestingPro Fair Value estimate stands at $17.55, which, compared to Piper Sandler's $48.00 price target, suggests a more conservative valuation of the company's stock. This discrepancy highlights the importance of investors conducting their own research and considering multiple viewpoints when evaluating investment opportunities.

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