William Blair initiates coverage on Aardvark Therapeutics stock with Outperform rating

Investing.com - William Blair initiated coverage on Aardvark Therapeutics Inc (NASDAQ:AARD) with an Outperform rating, citing the company’s innovative approach to treating Prader-Willi syndrome (PWS) and obesity. The stock, currently trading at $15.61, has seen a remarkable 15.12% return over the past week, though InvestingPro data suggests the company is trading above its Fair Value.

The firm highlighted Aardvark’s lead candidate ARD-101, an oral therapy targeting bitter taste receptors in the gastrointestinal tract that is currently in Phase III trials for PWS. The treatment works by promoting cholecystokinin signaling and GLP-1 secretion, which increases satiety.

William Blair estimates the global total addressable market for PWS at approximately $10 billion, with only one approved treatment currently available, suggesting significant market opportunity for Aardvark’s therapy. With a market capitalization of $339.88 million, Aardvark maintains a strong financial position with a current ratio of 12.03, indicating its liquid assets substantially exceed short-term obligations.

The firm also noted potential upside from ARD-201, a combination of ARD-101 and a DPP-4 inhibitor being developed for obesity treatment. This combination could enhance efficacy by preventing degradation of incretins such as GLP-1 and GIP.

According to William Blair, ARD-201 could serve as an oral and more tolerable alternative to GLP-1 receptor agonists in the obesity market, which the firm believes could reach at least $100 billion in total addressable market.

In other recent news, Aardvark Therapeutics has made significant progress in its clinical trials. The company announced the dosing of the first patient in Australia for its Phase 3 HERO trial, with all participants completing the trial enrolling in the open-label extension study. Additionally, Aardvark received regulatory clearance for enrollment at clinical sites in Canada and the United Kingdom, maintaining its timeline for a topline data readout in the third quarter of 2026.

Raymond James has reiterated its Strong Buy rating on Aardvark Therapeutics, maintaining a $47 price target, influenced by competitor data in the Prader-Willi Syndrome treatment space. Stifel also maintains a Buy rating with a $24 target, emphasizing the importance of the ongoing Phase 3 HERO trial. These developments come as Raymond James initiated coverage of the company, highlighting the potential of Aardvark’s ARD-101 treatment for Prader-Willi syndrome.

These updates reflect the company’s ongoing efforts and strategic positioning within the biotechnology sector.

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