FDA Approves New Drug Application For Axcella’s AXA1125; Shares Pop 10%

Shares of Axcella Health jumped 10.2% on April 13 after the clinical-stage biotechnology company announced that the US Food and Drug Administration (FDA) has approved its Investigational New Drug (IND) application for AXA1125, the multi-targeted oral product candidate designed for the treatment of non-alcoholic steatohepatitis (NASH).

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Axcella (AXLA) CEO Bill Hinshaw said, “This IND follows close on the heels of AXA1665’s IND clearance earlier this year, ushering in an exciting new era for Axcella as we seek to tackle a variety of complex diseases and address important unmet needs for patients utilizing multi-targeted EMM compositions.”

Following the FDA clearance, Axcella is likely to enter directly into a Phase 2b clinical trial in the second quarter of 2021. These clinical trials will evaluate the efficacy of AXA1125 in adult patients with biopsy-confirmed F2/F3 NASH.

NASH is the most severe form of non-alcoholic fatty liver disease (NAFLD) related to significant morbidity and mortality globally. This disease is expected to impact up to 40 million Americans, including 10% of children. Notably, this chronic and progressive liver disease currently has no approved therapies in the United States. (See Axcella stock analysis on TipRanks)

Following the development, Wedbush analyst Liana Moussatos reiterated a Buy rating and a price target of $11 (136% upside potential) on the stock.

According to Moussatos, “the positive AXA1125-003 results, coupled with the oral route of administration and favorable tolerability profile to date, reinforce AXA1125’s competitive position among future NASH treatments.”

The consensus rating among analysts is a Strong Buy based on 4 unanimous Buys. The average analyst price target stands at $12.75 and implies upside potential of 173.6% to current levels. Shares have gained 35.5% over the past year.

Furthermore, TipRanks data shows that financial blogger opinions are 100% Bullish on Axcella, compared to a sector average of 69%.