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Acasti Pharma Inc

Mackie sees sales potential of Acasti's CaPre drug, maintains Speculative Buy rating

In a research note, Mackie wrote that the market is 'waking up' to the potential of CaPre, which treats severe hypertriglyceridemia

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CaPre is an omega-3 phospholipid to combat high levels of triglycerides, or fatty molecules

Mackie Research is maintaining a Speculative Buy rating on Acasti Pharma Inc (CVE:ACST) (NASDAQ:ACST) after the company posted its fiscal 2019 results showing it was well-funded to proceed with clinical trials.

The Laval, Quebec-based pharmaceutical company is advancing its lead drug CaPre, an omega-3 phospholipid to combat high levels of triglycerides, or fatty molecules.

The research firm set a price target of C$8.70 and said that CaPre’s sales potential is “highly underestimated” in a note on Thursday.

READ: Acasti Pharma is well-funded to complete Phase 3 trials of lead drug candidate CaPre

Acasti is aiming to present topline results at the American College of Cardiology meeting in March 2020.

“We consider these results very important as they could ultimately validate CaPre is the best-in-class (omega-3) product by showing better blood lipid management than GlaxoSmithKline’s Lovaza, Amarin’s Vascepa and AstraZeneca’s Epanova,” wrote Mackie analysts Andre Uddin and Yue Ma.

“A best-in-class drug should achieve market leadership easily, regardless of its order of market entry.”

The analysts also wrote that the market is “waking up” to the potential of CaPre, which treats severe hypertriglyceridemia (HTG), a metabolic condition that contributes to increased risk of cardiovascular disease and pancreatitis.

Competitive advantage

The firm said that currently available omega-3 drugs for severe HTG have unwanted side effects, such as GSK Lovaza and Amarin’s Vascepa, which both have a significant food effect requiring a high fat diet for better absorption. Other side effects of current drugs on the market include elevated low-density lipoprotein-cholesterol (LDL-C), which in turn may increase the risk of heart disease.

“Acasti’s CaPre demonstrated in previous clinical studies that it was significantly TG lowering, did not elevate LDL-C, had no food effects and had an excellent safety profile and no fishy taste,” noted Uddin and Ma.

Analysts pointed to blockbuster drug Lipitor as an example to show that best-in-class drugs can achieve better market penetration that first-movers in the cardiovascular market. Lipitor was the third drug to hit the market and quickly achieved a 42% market share, putting it atop its competitors.

Topline results expected

In its financial results released Wednesday, Acasti said it remained on track to report top-line results for its primary endpoint of lowering triglycerides for TRILOGY 1 in December 2019, and for TRILOGY 2 in January 2020, which Mackie noted as a key catalyst for the company.

Although the company reported no revenue and a higher net loss for the year, Mackie noted that “financials are less important” because Acasti is still a clinical-stage drug development company.

Acasti’s shares were down 4.6% on Thursday morning after a rally yesterday, at C$1.46. On the Nasdaq, shares slipped 6.5% at US$1.12.

Contact Angela at [email protected]

Follow her on Twitter @AHarmantas

Quick facts: Acasti Pharma Inc

Price: $2.87

Market: TSX-V
Market Cap: $243.43 m
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