Why This Ayala Pharmaceuticals Analyst Is Bullish

The Phase 2 study of Ayala Pharmaceuticals Inc’s AYLA AL101 candidate is scheduled to begin in the back half of this year.

Although the first data from the study could come during 2021, a safety assessment of the first six patients may be available by the close of 2020, according to Raymond James.

The Ayala Pharmaceuticals Analyst: Dane Leone initiated coverage of Ayala Pharmaceuticals with an Outperform rating and $24 price target. 

The Ayala Pharmaceuticals Thesis: AL101 for adenoid cystic carcinoma (ACC) is the lead clinical program, which involves subjects with notch-activating mutations that are either newly diagnosed with metastatic ACC or have progressed after prior therapy, Leone said in the Tuesday initiation note. (See his track record here.)

Clinicians involved with the program indicate that the candidate’s 4mg dosage is well-tolerated, and that the 6mg dosage could improve clinical response, the analyst said. 

AL101 will also be evaluated for the treatment of heavily pre-treated patients with triple-negative breast cancer and notch-activating mutations. Since the Phase 1 study results involved a combination agent approach, the data is difficult to interpret for the dosage being used in the Phase 2 study, he said. 

The objective response rate of around 36% compares favorably with the standard of care, Leone said. 

While Ayala Pharmaceuticals is developing AL102 as an oral, selective gamma secretase inhibitor for desmoid tumors and multiple myeloma, this is not included in the estimates, the analyst said. 

AYLA Price Action: Shares of Ayala Pharmaceuticals were up 2.11% at $14.50 at the time of publication Wednesday.

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