Sagimet Biosciences: A Strong Buy on Robust Financials and Unique NASH Treatment Potential

Jonathan Wolleben, an analyst from JMP Securities, reiterated the Buy rating on Sagimet Biosciences, Inc. Class A (SGMT – Research Report). The associated price target remains the same with $48.00.

Jonathan Wolleben has given his Buy rating due to a combination of factors including the positive outlook for Sagimet Biosciences’ lead product, denifanstat, and the company’s strong financial position. He highlights the significant milestone of an end-of-Phase 2 meeting with the FDA, which bodes well for the anticipated Phase 3 program set to commence in the second half of the year. Furthermore, the $194 million in cash reserves that Sagimet ended the first quarter with is seen as providing a solid financial runway through 2025, underscoring the company’s fiscal health and ability to sustain its operations and development programs.
Wolleben also notes the unique standing of denifanstat in the NASH treatment landscape as the only oral FASN inhibitor in development, which was further validated by impressive Phase 2b results. He anticipates that the upcoming Phase 3 trials will largely mirror the successful earlier study in terms of patient population, dosage, and duration. The analyst’s conviction in the drug’s potential is solidified by his projection of blockbuster sales and the consideration of a substantial value gap between Sagimet and its closest competitors. This projection, combined with the anticipation of high interest at the upcoming EASL presentation, reinforces the Buy rating and the $48 risk-adjusted, DCF-supported price target.

In another report released on May 2, H.C. Wainwright also initiated coverage with a Buy rating on the stock with a $32.00 price target.

Based on the recent corporate insider activity of 29 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of SGMT in relation to earlier this year.

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Sagimet Biosciences, Inc. Class A (SGMT) Company Description:

Sagimet Biosciences Inc., a clinical-stage biopharmaceutical company, develops therapeutics called fatty acid synthase (FASN) inhibitors for the treatment of diseases that result from dysfunctional lipid metabolism pathways. Its lead drug candidate is Denifanstat, a FASN inhibitor for the treatment of nonalcoholic steatohepatitis and acne. The company is also developing TVB-3567, a FASN inhibitor for the treatment of various types of cancers. The company was formerly known as 3-V Biosciences, Inc. and changed its name to Sagimet Biosciences Inc. in August 2019. Sagimet Biosciences Inc. was incorporated in 2006 and is headquartered in San Mateo, California.