On Monday, the stock price target for Akero Therapeutics (NASDAQ: NASDAQ:AKRO) was raised to $61.00 from the previous target of $41.00 by Cantor Fitzgerald, while the firm maintained its Overweight rating on the shares. The adjustment follows the release of promising clinical trial results for Akero's EFX therapy, particularly in patients with advanced fibrosis.
The company's EFX therapy showed significant efficacy in a two-year study, with 75% of patients experiencing fibrosis improvement. This has been a critical factor in supporting the investment case for Akero, especially for the treatment of patients with stage F4 of the disease, known as MASH. The latest data indicates that longer treatment durations with EFX could lead to greater benefits in fibrosis reduction.
The positive trial outcomes have bolstered confidence in the potential success of EFX in treating stage F4 MASH patients. The analyst from Cantor Fitzgerald highlighted that the significant improvements observed in the trial suggest that any safety or tolerability concerns might be more readily accepted by both physicians and patients, given the severity of the disease in this patient group.
In light of the recent findings, the probability of success (PoS) for the EFX treatment in stage F4 patients has been increased to 40% from the previous estimate of 10%. This revision has influenced the analyst's decision to raise the discounted cash flow (DCF) valuation sensitivity, leading to the new price target of $61 per share.
The analyst concluded that Akero Therapeutics' stock should be reacting more positively to the recent trial data and recommended buying the shares. The company's stock is expected to gain traction following the analyst's updated outlook and the encouraging trial results for its EFX therapy.
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