Piper Jaffray Starts CymaBay At Overweight With $4 Target, Discusses MBX-8025

In a report published Tuesday, Piper Jaffray analyst Edward A. Tenthoff initiated coverage of

with an Overweight rating and a price target of $4, after news that the company had raised cash to advance MBX-8025. CymaBay issued 7.1 million shares at $2.81 per share, taking the estimated pro forma cash to $51 million, or $2.10 per share. CymaBay plans to invest this capital to advance MBX-8025 in Homozygous Familial Hypercholesterolemia (HoFH), data from which is expected in 4Q15, as well as initiate a Phase II trial in Primary Biliary Cirrhosis (PBC). "In a Phase II trial in mixed dyslipidemia patients, MBX-8025 significantly reduced LDLc and markers of liver inflammation. Now CymaBay is focusing development of MBX-8025 in rare conditions with unmet need, potentially accelerating the path to market," analyst Edward Tenthoff wrote. CymaBay is conducting a Phase II study in HoFH and, based on positive results, the company may initiate pivotal Phase II trials in 2016 and reach the market in 2020. CymaBay is to begin a 12-week Phase II study of MBX-8025 in 4Q15. Tenthoff expects data in 4Q16 and a US launch in 2021. "Arhalofenate completed a Phase IIb trial in gout earlier this year. Despite mixed results, we see an opportunity for arhalofenate to be used in combination therapy. CymaBay intends to partner arhalofenate prior to initiating Phase III trials," the Piper Jaffray report stated.