LBPH - Longboard Pharmaceuticals: After Stellar Gains A Period Of Relative Calm Seems Likely

2024-03-16 07:55:32 ET

Summary

• Longboard Pharmaceuticals has seen a significant increase in its stock price following positive data from its Phase 1b/2a study of bexicaserin, a treatment for developmental and epileptic encephalopathies.
• The company plans to initiate a Phase 3 study of bexicaserin and hopes to release data from an open-label extension study later this year.
• Longboard's financials show increased R&D and G&A expenses, but with a potential approval for bexicaserin in play, the company's market cap has risen to over $725m.
• After a >300% gain in the stock price in recent months, I am not sure there are enough catalysts in play to support further upside in 2024, although the company's second lead candidate, the S1P modulator LP659, is worth keeping an eye on.

Investment Overview

In a note for Seeking Alpha in May last year, I gave Longboard Pharmaceuticals (LBPH) a "Buy" recommendation, citing upcoming data catalysts for the company's two clinical stage assets - the 5-HT2C Superagonist LP352, now known as bexicaserin, being developed to treat developmental and epileptic encephalopathies (DEEs), and LP659 - and a centrally acting, sphingosine-1-phosphate (S1P) receptor subtypes 1 and 5 (S1P1,5) receptor modulator indicated for multiple neurological diseases.

Longboard was spun out of Arena Pharmaceuticals prior to its $6.7bn acquisition by Pfizer ( PFE ). Pfizer gained access to Arena's late stage autoimmune candidate, etrasimod, also an S1P receptor agonist, which has now been approved to treat ulcerative colitis, under the brand name Velsipity, with peak revenue expectations of ~$1bn in that indication....

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