On Wednesday, Piper Sandler adjusted its outlook on Aslan Pharmaceuticals (NASDAQ:ASLN), reducing the price target to $10 from the previous $15. The firm sustained its Overweight rating on the biotechnology company's stock. The revision reflects a recalibration due to recent financing activities by Aslan Pharma.
Aslan Pharma concluded the third quarter of 2023 with $40.8 million in cash and $38 million in debt. The company's financial strategy included the issuance of 5 million shares and an equal number of warrants, each priced at $1.00.
This move generated $5 million in gross proceeds, which is expected to extend the company's financial runway into the second half of 2024. This extension is anticipated to support potential developments, such as a partnership for eblasakimab and Phase IIa FAST-AA trial results for farudodstat in treating alopecia areata, which are due in mid-2024.
The company's recent TREK-DX study results have also been factored into the analyst's assessment. Earlier this week, initial blinded data from the study indicated that 45% (10 out of 22) of patients achieved an EASI-90 score, and 50% (11 out of 22) reached a vIGA score of 0/1 after 16 weeks of treatment. Notably, this included a 56% response rate (5 out of 9 patients) among those who had not adequately responded to dupilumab, a pre-existing treatment.
In response to high placebo rates observed in the TREK-DX data, Aslan Pharma has raised the EASI entry criteria to 18 and is in the process of expanding its trial sites overseas. These actions are intended to enhance the robustness of the trial outcomes and are planned to be completed by the end of 2024.
The firm's analyst cited the dilutive impact of the recent financing as the primary reason for the price target adjustment. Despite the reduction, the Overweight rating was reiterated, signaling a continued positive outlook on Aslan Pharma's stock performance.
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