Morgan Stanley’s Matthew Harrison initiated coverage of Syndax Pharmaceuticals Inc SNDX with an Overweight rating and price target of $22, while Citi’s Joel Beatty also initiated coverage of the company with a Buy rating and price target of $24.
Major Value Driver
Both analysts believe that the company’s lead molecule, entinostat could be a “major value driver.”
Analyst Matthew Harrison mentioned that Syndax Pharma was looking at novel immuno-oncology combinations for entinostat, which is a selective class I inhibitor that could have the ability to improve immunomodulator activity.
Testing In Cancers
The company has formed collaborations with some of the largest pharma companies to test combinations of the molecule with their PD-1/PD-L1s in breast, ovarian, lung and skin cancers. Harrison expects several of the Phase I studies to provide initial data over the next 12 months.
The company is also conducting a Phase III study of entinostat “in hormone receptor positive breast cancer as a single agent,” data for which is expected in 2018.
“Based upon PhII data, mgmt. received break-through designation from the FDA for entinostat in this indication,” Harrison stated.
Safety & Tolerability
The analyst also pointed out that given that entinostat had been dosed in more than 900 patients, along with long term follow up, the safety and tolerability profile was well established.
“While we view I/O combinations as the upside driver for SNDX, breast cancer, given its more mature dataset provides a valuation back-stop,” Harrison added.
Breast Cancer
Citi’s Joel Beatty pointed out that there was strong also pointed out that there was robust clinical support for entinostat in breast cancer, “based on a statistically significant OS benefit” in Phase 2 studies.
“We see potential for large upside from Entinostat in combination with immunotherapy agents (ph1/2, next data in June) based on preclinical suggest the agent has synergistic effects on upregulating cytotoxic T-cells when given with checkpoint inhibitors,” Beatty noted.
Big Pharma Collaborations
The analyst expressed optimism regarding Syndax Pharma’s collaborations with some of the larger pharmaceutical companies, saying that this was likely to drive development while allowing the company to retain full rights, ex-Asia.
“Although several HDAC inhibitors are in development, Entinostat is differentiated because it is Class I specific, which could give it a superior tolerability profile, especially in combination with checkpoint inhibitors,” the Citi report specified.
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