Feltl & Co. has initiated coverage of Dipexium Pharmaceuticals (NASDAQ:DPRX) with a “strong buy” rating and price target of $21.75. The stock closed at $8.95 on Wednesday.
“We anticipate the company executing on multiple milestones over the coming 12 months, including topline data on DPX-305 and DPX-306, the soon-to-begin Phase 3 studies,” with Locilex, a topical antibiotic targeted at mild diabetic foot infections (DFI), writes analyst Ben Haynor.
“If approved, Locilex would be the first antibiotic approved for use in mild DFI cases,” he added.
Currently, systemic (usually oral) antibiotics are used off-label to treat mild DFI. Mr. Haynor said these systemics suffer from multiple drawbacks, including development of systemic antibiotic resistance (“super bugs”), narrow spectrum coverage, poor safety profiles (including black box warnings), and drug-drug interactions.
“We anticipate Locilex would quickly enter the clinical guidelines should it gain approval,” he added. “In our diligence, we spoke with multiple key opinion leaders who sit on the clinical guideline panels and suggested to us a product such as Locilex would enter the guidelines almost immediately.”
Mr. Haynor figures Dipexium has the potential to capture 45% of the mild DFI and 18% of the moderate DFI theoretical addressable market by 2022, resulting in peak sales of $323-million.
