CJC comments from Canada -ConjuChem stock jumps 13% on test results
LEONARD ZEHR
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Better-than-expected test results with a potential breakthrough drug to treat Type 2 diabetes sent ConjuChem Inc.'s stock price to a 13-per-cent gain in hectic trading yesterday.
"We believe the stock has more room for appreciation," Orion Securities analyst Joe Walewicz said in a report. He initiated coverage of ConjuChem with an "overweight" recommendation and 12-month target price of $18.
On the Toronto Stock Exchange, ConjuChem rose $1.69 to $14.17, putting it within striking distance of its 52-week high of $14.97.
The Montreal-based drug developer said that based on interim Phase II results, normal glucose or a "therapeutically meaningful improvement" was achieved in 80 per cent of diabetic patients after receiving its DAC:GLP-1 drug for 28 days.
Moreover, 27 per cent of patients reached the target HbA1c level of 7 per cent or less.
HbA1c is a 90-day measure of the amount of hemoglobin in the bloodstream that has bound to glucose and is the standard measurement in diabetes management.
The company said the drug also showed a statistically significant reduction of 0.8 per cent in HbA1c, which analysts said wasn't expected at this stage of the trial.
Regulators would look for at least a 0.7-per-cent reduction in HbA1c in a final Phase III trial, analysts say.
ConjuChem president and chief executive officer Jacques Lapointe said the company hadn't planned to report HbA1c reductions because 28 days wasn't considered to be enough time to get reliable data.
"The fact that such strong reductions were achieved under the circumstances, with such a high level of statistical significance, could not be ignored," he said.
"We came to the conclusion that this information was material and should be publicly disclosed."
The drug also produced statistically significant reductions in body weight of patients and average fasting glucose levels, without any notable adverse side-effects.
"We are becoming more convinced with each piece of clinical news that DAC:GLP-1 is a commercially viable anti-diabetes drug," Sprott Securities analyst David Dean said in a report.
He rates the stock as a "buy," with a 12-month target price of $21.50.
The interim results prompted Dundee Securities analyst David Martin to raise his 12-month target price to $18 from $16, citing reduced risk.
In a new report, he said the efficacy of DAC:GLP-1 was competitive with Amylin Pharmaceutical Inc.'s Exenatide, and slightly better on some measures.
Among other things, Mr. Martin said patient responses were achieved with once-daily dosing of DAC:GLP-1, compared with twice-daily dosing of Exenatide, a synthetic version of an animal version of GLP-1, which has completed clinical testing.
"By midyear, we expect further differentiation of DAC:GLP-1 on the basis of dosing convenience," he said.
"When final three-month data are reported for all 196 patients, we expect most will be adequately maintained with dosing every two days or longer."
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