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aTyr Pharma shares target raised by Jones Trading on Phase 3 trial optimism

EditorEmilio Ghigini
Published 05/29/2024, 07:54 AM
ATYR
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On Wednesday, aTyr Pharma (NASDAQ:LIFE), a biotechnology firm, had its shares target increased by Jones Trading from $12.00 to $22.00, while the firm also reiterated its Buy rating on the stock.

The adjustment comes as aTyr Pharma prepares for Phase 3 topline data expected in mid-2025, focusing on the treatment of pulmonary sarcoidosis, a condition traditionally managed with corticosteroids.

Corticosteroids, while being the standard treatment, are known to cause numerous side effects such as obesity, diabetes, and cardiovascular issues. aTyr Pharma's ongoing Phase 3 trial is anticipated to demonstrate a reduction in corticosteroid usage by 3 mg/day.

According to Jones Trading, this equates to a significant decrease of over 1000 mg per year, which could make a compelling case to regulatory bodies and healthcare payers due to the potential for improved patient quality of life and fewer side effects from steroid overuse.

Jones Trading's valuation model, which adopts a conservative approach with a weighted average probability of success/market penetration rate of 27%/31%, projects peak sales of approximately $1 billion by 2034 in the pulmonary sarcoidosis market.

Additionally, the model forecasts $300 million in peak sales by 2035 for systemic sclerosis-related interstitial lung disease (SSc-ILD).

The firm highlighted aTyr Pharma's financial position, noting that the company has a cash runway extending through the second half of 2025. The current trading price is approximately 0.4 times the adjusted peak sales multiple when discounted back to 2024.

Jones Trading sees the potential for upside from the forthcoming data in SSc-ILD and recommends ownership of the stock. The firm has initiated research coverage on aTyr Pharma with a Buy rating and a price target of $22.00.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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