Mackie Research has repeated a Speculative Buy rating on drug developer Acasti Pharma Inc (NASDAQ:ACST) (CVE:ACST) in the wake of news that its main competitor Amarin has received a setback on approval for its Vascepa heart drug.
On Thursday, Amarin revealed that the US Food & Drug Administration (FDA) has scheduled an advisory committee (adcom) meeting on the drug for November 14 this year.
In a note to clients, Mackie analyst Andre Uddin pointed out that Amarin had recently indicated that they did not think they would need an adcom meeting for their sNDA (supplemental new drug application) for Vascepa, thus the news will come as somewhat as a surprise to investors,
The analyst said an advisory meeting now scheduled for November would imply Amarin’s new drug approval decision would likely be extended into late December.
Acasti is advancing its own CaPre drug to treat hypertriglyceridemia (high levels of triglycerides in the blood), which is known to contribute to heart disease.
The Mackie analyst noted that Acasti shares have often traded up or down depending on news from Amarin and highlighted that the stock still looks cheap for a Phase III asset company "with a potential best-in-class product".
"We believe investors should hang tight, as more of a run up should occur as we move closer to the Phase III results," he said.
The analyst noted that topline results for CaPre's so-called TRILOGY trials are expected in December this year and January, 2020, respectively.
Uddin said he considers these results very important as they could ultimately validate CaPre is the best-in-class OMG3 product by showing better blood lipid management than Amarin’s Vascepa and pharma giants GlaxoSmithKline's Lovaza and AstraZeneca’s Epanova.
Mackie has a price target of C$8.70 for Acasti shares which are currently trading at C$2.84.
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