Optimistic Buy Rating for Rezolute’s RZ402 Drug Candidate Amid Promising DME Treatment Prospects

Analyst Jason Butler of JMP Securities reiterated a Buy rating on Rezolute (RZLT – Research Report), retaining the price target of $7.00.

Jason Butler has given his Buy rating due to a combination of factors regarding the potential of Rezolute’s RZ402 drug candidate. His optimism is rooted in the imminent release of Phase 2 results for RZ402, which is being developed to treat diabetic macular edema (DME). This oral plasma kallikrein inhibitor has shown promise in both preclinical studies and Phase 1 trials, indicating it could effectively engage its target. Butler’s enthusiasm is further bolstered by the drug’s potential to fill a gap in the market for DME patients who are unresponsive to existing anti-VEGF therapies, which accounts for a substantial portion of the patient population.

Furthermore, Butler perceives a significant upside to Rezolute’s valuation, contingent on favorable Phase 2 outcomes. With the DME market projected to grow steadily, successful trial results could have a substantial positive impact on Rezolute’s stock price, potentially leading to a doubling or more in value, especially if secondary endpoints, such as visual acuity, also show significant improvement. Despite considering the probability of trial success to be moderate, Butler highlights the limited downside risk to Rezolute’s stock price if the results are unfavorable, suggesting confidence in the company’s broader potential and pipeline, including other developments like RZ358 for tumor-associated hyperinsulinism.

In another report released yesterday, JonesTrading also initiated coverage with a Buy rating on the stock with a $10.00 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.