Douglas Tsao, an analyst from H.C. Wainwright, maintained the Buy rating on Rezolute (RZLT – Research Report). The associated price target is $14.00.
Douglas Tsao’s Buy rating for Rezolute’s stock (RZLT) is based on several compelling factors. The company is on track to start a Phase 3 study for RZ358, a drug intended for patients with congenital hyperinsulinism (CHI) who aren’t responding adequately to the standard of care. This study has gained significant momentum following the drug’s PRIME designation from the EMA, which was based on promising Phase 2b study results. Additionally, the withdrawal of Crinetics from the CHI space has opened a window for Rezolute to establish clear leadership in this niche market, enhancing the revenue potential for RZ358.
Furthermore, the company is gaining traction with RZ358’s potential in treating tumor-mediated hyperinsulinism. Cases of successful use of the drug, such as the resolution of refractory hypoglycemia in a patient with metastatic insulinoma, have raised its profile. Rezolute is also making strides with its second clinical asset, RZ402, which is currently in a Phase 2 study with patient recruitment nearing completion. Tsao’s Buy rating and $14 price target are based on a sum-of-the-parts net present value valuation for RZ358 and RZ402, factoring in the probability of success for each asset given the strength of available data. However, Tsao also acknowledges potential risks related to finance, dilution, competition, regulation, and the COVID-19 situation.
In another report released on November 14, JMP Securities also reiterated a Buy rating on the stock with a $7.00 price target.
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Rezolute (RZLT) Company Description:
Rezolute, Inc. is biopharmaceutical company, which engages in the development of drug therapies for patients with metabolic and orphan diseases. Its products portfolio include RZ358-Phase 2, an antibody for the ultra-orphan indication of congenital hyperInsulinism; AB101-Phase 1, a once-weekly injectable basal insulin; and RZ402 which targets diabetic macular edema. The company was founded by Nevan Charles Elam, Ho Young Huh, and Sankaram Mantripragada on July 26, 2010 and is headquartered in Redwood City, CA.
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