William Blair Boosts OncoGenex Pharma Target To $6, Hikes Custirsen Probability To 70%

In a report published Tuesday, William Blair analyst Y. Katherine Xu maintained an Outperform rating on

, while raising the price target from $5 to $6. "OncoGenex announced that the Phase III ENSPIRIT trial of custirsen in second-line non–small-cell lung cancer (NSCLC) passed its second and final futility analysis by the trial's independent data monitoring committee (IDMC), suggesting that there is a signal of overall survival benefit at the time of analysis," Xu reported. The company intends to continue with the study as planned, with top-line data likely to be announced in 2H 2016. The Phase III ENSPIRIT trial aims to evaluate the safety and efficacy of the company's lead asset, custirsen, in metastatic (stage IV) NSCLC patients with previously failed first line chemotherapy. The main outcome of the study is overall survival. In April, the company made some changes to the study to speed it up and to bring about a more rigorous interim futility analysis. The analyst believes that the early overall survival metrics are encouraging, while increasing the probability of success for custirsen from 55 percent to 70 percent in both metastatic castration-resistant prostate cancer (mCRPC) and NSCLC. The analyst expects peak worldwide custirsen sales at $225 million in mCRPC and $250 million in second line NSCLC. "ENSPIRIT passing this futility analysis may bode well for the likelihood of success of AFFINITY, whose top-line data readout is expected around the end of 2015, a decisive and critical catalyst for OncoGenex shares," Xu added.