Cytokinetics Gets New Price Target From Citi After Major Rally
This biotech name got off on the right foot to start September.
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Trading commenced on Tuesday for the month of September after Labor Day on Monday.
My portfolio kicked off the month in fine fashion, thanks largely to the performance of two of my core biotech positions following trial results. This also helped the SPDR S&P Biotech ETF XBI power to a gain of just over 3.3% to start a holiday shortened trading week. These performances helped put my portfolio solidly in the green in what was a down day of trading in the markets Tuesday.
I am going to highlight both of these names in today’s column, as this positive news could power further rallies in each of these stocks.
Let’s start with Cytokinetics, Incorporated CYTK. I last gave a shout out to this mid-cap biopharma name in early June. Over the weekend, management posted Phase 3 data around its primary drug candidate aficamten in a study evaluating it to treat symptomatic obstructive hypertrophic cardiomyopathy or oHCM. This condition results in an abnormally thickened heart muscle.
The data, to understate things, was very well received by the market. The stock rallied just over 40% in trading on Tuesday. Not surprisingly, several analyst firms like Citigroup and Needham reissued Buy ratings with Citi bumping up its price target to $84 a share. The data makes the company’s NDA around aficamten, now scheduled for December, all but a slam dunk.
Cytokinetics is partnered with Sanofi SNY, who will distribute and commercialize aficamten in Europe and China and pay Cytokinetics royalties and milestone payouts. The company has a bright future, and I will add to my position on this name in any dips in the market.
As nice as Cytokinetics' rally in the market was to see on Tuesday, it paled in comparison to the move my position in Mineralys Therapeutics (MLYS) made on Tuesday. The stock rallied over 85% during the day. The trigger was also Phase 3 study results that hit the wires. However, this new data came from AstraZeneca AZN. The giant drug maker released full results from a Phase 3 trial for its blood pressure candidate baxdrostat.
Baxdrostat is targeting hard-to-control hypertension. The results reached their primary endpoints. However, data was evaluated by the market and found to be lacking to the results from late-stage studies Mineralys’ lead candidate lorundrostat produced around the same indication in March of this year. This positions lorundrostat as a potential "best in class" aldosterone synthase inhibitor in what is a large market.
If all goes according to plan, lorundrostat should launch in 2027 and the company smartly raised an additional $250 million in additional capital following the rally in the shares Tuesday. This positions Mineralys Therapeutics to be successful as a standalone entity.
However, with a market cap of just less than $2 billion and a wholly owned potential best-in-class treatment, I expect to hear a lot of takeover chatter in the coming months around Mineralys. I am not chasing Tuesday’s huge rally. However, if the stock comes down a bit to the mid-$20s, I will add to my holdings in MLYS.
At the time of publication, Jensen was long CYTK, MLYS and XBI.
