Wedbush Downgrades Infinity Pharma To Underperform, Slashes Target To $3

Wedbush’s David M. Nierengarten downgraded the rating for Infinity Pharmaceuticals Inc. INFI from Neutral to Underperform, while reducing the price target from $8 to $3. He said that safety concerns related to Zydelig are likely to limit Duvelisib’s opportunity.

The FDA and EMA have issued warnings of increased reports of SAEs, including cases that were fatal, in three clinical studies of Zydelig [idelalisib] in combination with other anti-cancer therapies in chronic lymphocytic leukemia [CLL] and non-Hodgkin’s lymphoma [NHL]. In response, Gilead Sciences, Inc. GILD has terminated six combo trials of Zydelig.

“The SAEs appear to be mostly infection-related, and the EMA has issued advice recommending that all patients on Zydelig receive antibiotic prophylaxis and be closely monitored for infection and leukopenia,” analyst David Nierengarten wrote.

Red Flags For Duvelisib

Safety issues related to Zydelig “raise red flags” or provide a negative read-through for Infinity Pharma’s duvelisib program, Nierengarten pointed out. Both these compounds have structural similarities as well as a similar mechanism of action. “A comparison across clinical studies suggests that duvelisib has a poorer safety profile compared to idelalisib,” the analyst said.

Additional Risk

Nierengarten mentioned that there was high probability of AbbVie Inc ABBV discontinuing its partnership with Infinity Pharma in 2016, since the “driving force” behind the partnership for the former company was to explore the combination of its BCL2 inhibitor venetoclax with duvelisib.