Mast Therapeutics Provides Clinical Developments Update; Range-Bound Trading A Mid-Term Plausibility

On Monday, Mast Therapeutics Inc MSTX provided an update on its business strategy and the clinical development of its product candidate AIR001.

Laidlaw’s Yale Jen maintains a Neutral rating on the company.

Update

“Management reiterated that MSTX will focus on clinical development of AIR001 (inhaled sodium nitrite) as a potential heart failure with preserved ejection fraction (HFpEF) treatment,” Jen mentioned.

The company intends to continue to support the three investigator-sponsored Phase II trials in 2016 and 2017.

Mast Therapeutics also said that it would evaluation the opportunities for partnering out AIR001, and potentially vepoloxamer.

Vepoloxamer development activities are expected to wind down and be completed by 4Q16.

Related Link: Shkreli Warned You: Mast Therapeutics Plummets 80% After Sickle Cell Drug Phase 3 Trial Fail

The company also stated that it would repay its $10 million debt facility in early October, with the additional repayment of the remaining $3.5 million in equal monthly installments through January 1, 2019.

Disappointing Results

“We were disappointed with the negative outcome of the EPIC study, even given that enriched pediatric and hydroxyurea (HU) treated patients were included in the study, and the significant impairment of the vepoloxamer value,” Jen stated.

However, the analyst believes the use of AIR001 in HFpEF continues to be promising, given that nitrite is known for its vasodilatory and anti-inflammatory capabilities.

Jen expects Mast Therapeutics shares to remain range bound in the near future, until the completion of the HFpEF Phase II study and reporting of the data.

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