Despite Trial Setback For Acelyrin's Lead Program, Analyst Shows Optimism

Acelyrin Inc SLRN announced topline results from Part B of a Phase 2b/3 trial evaluating izokibep for moderate-to-severe Hidradenitis Suppurativa (HS). 

The primary endpoint of HiSCR75 at week 16 did not meet statistical significance. 

HC Wainwright sees the update as a setback, but the analyst, Emily Bodnar, is still confident in the second Phase 3 study being positive and believes psoriatic arthritis (PsA) Phase 2b/3 data in 1Q24 could add to confidence in HS, if positive.

The analyst writes that the drug could still be approved in HS if the second Phase 3 study is positive, given that there is sufficient evidence that the drug is active when looking at the interim and Last Observation Carried Forward analyses.

HC Wainwright lowered the price target from $44 to $30 with a Buy rating, noting a reduced probability of success.

The company is still evaluating izokibep out to Week 45 in the Part B HS study and is enrolling patients in another Phase 3 study, evaluating 160 mg QW vs. placebo. The company is potentially increasing the patient size to 200 per cohort.  

Increasing the patient size of the study could potentially prolong the time to complete the study, though the analyst continues to model the launch year of 2026. 

PsA is an underappreciated opportunity for izokibep, and the analyst estimates $2.4 billion in peak sales by 2036.

Price Action: SLRN shares are down 56.90% at $12.03 on the last check Tuesday.