Brean Initiates SCYNEXIS With Buy Rating, $16 Price Target

Brean Capital’s Jonathan Aschoff initiated coverage of SCYNEXIS Inc SCYX with a Buy rating and a price target of $16, citing prospects of the company’s leading novel antifungal drug.

SCY-078 is being developed as an intravenous as well as an oral agent for the treatment of invasive candidiasis [IC] and invasive aspergillosis [IA].

“In in vitro and in vivo studies, SCY-078 has shown strong antifungal activity against a broad range of clinically important fungi. SCY-078 has also been shown to be well tolerated in multiple human Phase 1 trials at clinically relevant dose levels in about 100 healthy volunteers,” analyst Jonathan Aschoff wrote.

In November 2015, SCYNEXIS initiated a Phase 1 trial of the compound’s intravenous [IV] form. The oral form of the compound is in Phase 2 trials for the treatment of IC and vulvovaginal candidiasis [VVC]. Data from both are expected in 2Q16.

Prospects Of The Drug

Aschoff believes SCY-078 has the potential to “become the first glucan synthase inhibitor available both orally and intravenously, exposing patients to less risk, drug interaction, and cross-resistance.” He expects US approval and launch of SCY-078 for IC and IA in 2019, and EU approval and launch for IC and IA in 2020. The approval and launch of SCY-078 for VVC in the US and EU is expected in 2020.

The analyst estimates SCY-078 to generate first year US sales of about $3.2 million in 2019. He expects sales to grow gradually to about $111 million in 2022. SCYNEXIS is estimated to receive 20-25 percent royalty on ex-US sales, which translates to approximately $1.3 million in 2020 and $14.1 million in 2022.