Roth Capital's New Buy Rating On TetraLogic: 'SMAC'ing Cancer Around'

• The share price of Tetralogic Pharmaceuticals Corp TLOG has declined 70.54 percent year to date, touching a low of $1.37 on December 16.
• Roth Capital’s Joseph Pantginis has initiated coverage of the company with a Buy rating and price target of $5.
• Pantginis believes that the company could be the focus of “significant renewed interest,” with results from the Phase II studies of two of its lead products expected in 2016.

Analyst Joseph Pantginis mentioned that the results of the Phase II trials for birinapant in MDS and SHAPE in CTCL were expected in January 2016, while noting that “the primary risk for the company is financing overhang, which positive data could help to alleviate.”

Pantiginis believes that this is a crucial time in Tetralogic’s history, and that the data so far on the Phase II studies indicate that the read out could be positive.

Given that birinapant mimics SMAC, it targets a pathway that is broadly used by cancer cells and various infectious diseases to avoid programmed cell death or apoptosis.

While the lead indication of birinapant is MDS, Pantginis noted that some types of infectious diseases, including Hepatitis B, use the “same molecular machinery” to avoid apoptosis. Therefore, the company might decide to move birinapant into a Hepatitis B study to determine the drug’s safety profile.

“SHAPE data to date has shown strong efficacy in CTCL and, importantly, no observed systemic absorption. The company also has an open IND to start a study in alopecia areata,” Pantginis added.

In order to address its funding needs and the clinical data available to date, Tetralogic intends to initiate two pivotal studies, one for birinapant in MDS and the other for SHAPE in CTCL, in 2016.