Rezolute: Favorable Risk-Reward on Ersodetug Despite Mixed sunRIZE Data, Supported by Biomarkers, Breakthrough Designation, and Phase 3 Potential

Analyst Douglas Tsao from H.C. Wainwright reiterated a Buy rating on Rezolute and keeping the price target at $5.00.

Douglas Tsao has given his Buy rating due to a combination of factors tied to both clinical data and regulatory positioning. He argues that, despite the sunRIZE trial missing its main endpoints, biomarker results show that ersodetug is clearly modulating insulin signaling in treated patients, consistent with prior RIZE study findings. He also notes that unusually intensive glucose monitoring during the study may have inflated the placebo group’s apparent benefit, making it harder to see the true treatment effect. The fact that nearly all completing patients chose to remain on ersodetug in the extension phase, with some managing their disease solely on the drug, is viewed as strong, real-world evidence supporting its effectiveness.

Tsao further emphasizes Rezolute’s strategic advantage from Breakthrough Therapy Designation in congenital hyperinsulinism, which should enable constructive discussions with the FDA and potentially a more streamlined development path in a pediatric, high-need setting. He highlights the encouraging experience from the expanded access program in tumor hyperinsulinism, where most patients were able to discontinue IV glucose or TPN, supporting the likelihood of success for the ongoing Phase 3 upLIFT trial. His valuation, based on risk-adjusted revenue projections and differentiated probabilities of success for the cHI and tumor HI indications, underpins a $5.00 price target. While he acknowledges financing, dilution, commercial, and regulatory risks, he concludes that the risk-reward profile remains favorable, justifying a Buy recommendation.

Tsao covers the Healthcare sector, focusing on stocks such as Praxis Precision Medicines, Alkermes, and Biohaven Ltd.. According to TipRanks, Tsao has an average return of 16.8% and a 52.82% success rate on recommended stocks.