ATXS - Astria Therapeutics: Too Much Risk Too Little Reward Despite Near-Term Data Readout

2024-02-04 04:19:51 ET

Summary

• Astria Therapeutics (formerly Catabasis Pharmaceuticals) acquired Quellis Biosciences and its lead program, STAR-0215, for the treatment of hereditary angioedema (HAE) in 2021.
• The company has successfully completed a Phase 1 study for STAR-0215, demonstrating positive results in terms of safety, tolerability, and efficacy.
• Astria is now moving forward with a Phase 1b/2 study to establish proof-of-concept for STAR-0215 in HAE patients, with initial results expected in Q1 2024.
• The promise of HAE data in Q124 appears to have lifted the share price and allowed the company to raise funds.
• If the promise of upcoming is already baked into the share price, given how far behind the competition Astria is in HAE, and in atopic dermatitis with a second candidate, I would give its stock a "sell" rating.

Investment Overview

The biotech industry can be a tough business to be in, but investors favour the sector, pouring money into even the earliest stage companies, who may not have much more than a molecule and high cash burn to offer in return.

Buying biotech stock is similar to buying a lottery ticket in the sense that if a biotech is successful at what it does, and brings a new drug with "blockbuster" potential to the verge of an approval, there is a good chance it will either be acquired by a Big Pharma, or, if the company chooses to go it alone, become a commercial stage pharma, valued at several times what the market believes the peak sales opportunity is for that drug....

For further details see: