Aviragen Therapeutics Receives A New Buy Rating, $5 Target

Aviragen Therapeutics Inc AVIR lead drug vapendavir for respiratory infections has blockbuster potential, H.C. Wainwright’s Ed Arce said in a report. He initiated coverage of the company with a Buy rating and price target of $5.

Aviragen Therapeutics has three direct-acting antiviral [DAA] compounds in Phase 2 development:

1. Oral vapendavir for human rhinovirus [HRV], which causes the common cold
2. Oral BTA585 for respiratory syncytial virus [RSV]
3. BTA074, a topical compound targeting human papillomavirus [HPV] for condyloma

Valuation Based On Lead Candidate

“While all three are novel drugs being developed for conditions with limited therapeutic options, we view the vapendavir commercial opportunity as the largest by several orders of magnitude, and as such, our AVIR valuation and positive thesis rests primarily on the company's lead candidate,” analyst Ed Arce wrote.

Vapendavir had achieved significant symptom improvements and quality-of-life outcomes in each of Days 5 through 14 in RHINO. In a prior dose-ranging, Phase 2a, HRV39 challenge study, the compound successfully reduced the number of positive subjects, viral load and peak titre in a dose-dependent fashion, as well as symptom improvement, Arce mentioned.

There is a lack of dose-limiting toxicities up to at least single 1,600 mg doses. Aviragen Therapeutics is studying vapendavir 264 mg and 528 mg BID in SPIRITUS, which raises the likelihood of positive results. “We believe positive SPIRITUS data is a likely meaningful catalyst for AVIR shares, especially given the shares currently trade at less than pro forma cash,” the analyst stated.

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