Cantor Is Slashing Its MEI Pharma Price Target

In a report published Tuesday, Cantor Fitzgerald analyst Daniel Brims maintained a Buy rating on

, while reducing the price target from $14 to $7, after reassessing the risk profile of Pracinostat. Further clinical development in MDS has increased the risk profile of Pracinostat. "We believe the lack of tolerability which resulted in the failure of the phase 2 trial to meet the primary end point of complete response has substantially increased the risk associated with this clinical program (currently 20% risk adjustment from 70% adjustment previously)," Brims said. "We believe the duration endpoints of overall survival and progression-free survival are better indicators of clinical benefit, and, though these endpoints are not powered for statistical significance, we believe numerically superior results will justify continued development, given a more tolerant dosing regimen," the analyst explained. Since there are fewer treatment options for AML patients, doctors may have become increasingly tolerant of a higher adverse event profile. There has been a delay in the Phase III front line AML study in order to evaluate optimized dosing regimens, although "this study can proceed as currently designed," Brims commented. The analyst believes that the single-arm Phase II trial data demonstrates the efficacy of Pracinostat and there could be a continued robust response rate during the Phase III trial. "Our peak sales expectation of >$375M is based on conservative penetration rates of 15% in front-line MDS, 30% in second-line MDS, and 35% in AML and risk adjustments of 20% in MDS as well as 70% in frontline AML," Brims added.