Yi Chen, an analyst from H.C. Wainwright, reiterated the Buy rating on Lexaria Bioscience. The associated price target was lowered to $4.00.
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Yi Chen’s rating is based on the promising safety and tolerability profile demonstrated by Lexaria Bioscience’s DehydraTECH-semaglutide in the Phase 1b trial. The interim results showed a significant reduction in adverse events, particularly gastrointestinal issues, compared to the control arm, Rybelsus. This improvement in safety could potentially lead to lower patient dropout rates and higher market adoption of GLP-1 drugs, which is a positive indicator for the company’s future prospects.
Despite the efficacy results not being as strong as Rybelsus, with less reduction in body weight and HbA1c levels, the safety profile of DehydraTECH-semaglutide remains a key factor in the Buy rating. The management noted an unusual robustness in Rybelsus’ performance during this study, which deviated from its historical data. Yi Chen anticipates that the DehydraTECH formulations will need to match the efficacy of existing GLP-1 drugs while maintaining their improved safety profile to achieve commercial success. The current market valuation of Lexaria Bioscience is estimated at $130 million, with a price target adjusted to $4 per share, reinforcing the Buy recommendation.