PhaseBio Analyst Says Coronavirus Study Creates Near-Term Catalyst

PhaseBio Pharmaceuticals Inc PHAS shares were skyrocketing Thursday after the company revealed it has received the go-ahead from the FDA for evaluating one of its lead assets for COVID-19 in clinics.

The PhaseBio Analyst

Stifel analyst Adam Walsh has a Buy rating on PhaseBio with a $14 price target, suggesting over 200% upside potential. 

The PhaseBio Thesis

There is rationale in the planned study given PB1046's MOA, and preclinical studies showing inhibition of cytokinine-mediated inflammatory responses with a vasoactive intestinal peptide, Walsh said in a Wednesday note. (See his track record here.)

The study of PB1046 in hospitalized COVID-19 patients at high risk for rapid clinical deterioration and acute respiratory distress syndrome, dubbed VANGUARD, is to be initiated by the end of June, with top-line data expected in the fourth quarter pending COVID disruptions, the analyst said.

Funding for the study would come from redistribution of resources away from early stage assets and ongoing clinical studies such as the paused Phase 2b study of PB1046 in pulmonary arterial hypertension, he said. 

If the drug candidate is approved for pre-ARDS, Walsh sees pricing in line with the PAH opportunity.

"Potential data in 4Q20 adds a possible near-term catalyst, which PHAS was previously lacking," the analyst said. 

Stifel also noted that company reiterated its commitment to advancing PB2452, another of its lead assets. 

PHAS Price Action

The stock was trading 40.05% higher at $6.19 at the time of publication Thursday.

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