MyoKardia Regains Rights to Cardiomyopathy Drug Candidates as Sanofi Deal Ends; Wedbush Raises Target

MyoKardia’s (MYOK) shares tumbled on Wednesday as it said Sanofi (SNY) isn’t extending a collaboration agreement, but Wedbush Securities raised its price target on the biopharmaceutical firm as it said its economic opportunity is increasing.

The company said it now has the global rights to all programs in its portfolio, including leading clinical-stage candidates mavacamten and MYK-491. MyoKardia and Paris-based Sanofi started their collaboration in 2014 to advance programs for treatment of hypertrophic cardiomyopathy and dilated cardiomyopathy, which are types of diseases affecting the heart muscle.

“We emphasize that Sanofi’s decision was not based on any adverse clinical findings but was rather a result of the company’s shifting strategic focus and an inability to re-negotiate deal terms more favorable to Sanofi (i.e. a greater share of the US opportunity),” Wedbush analysts David Nierengarten and Jeffrey La Rosa said in a note.

They raised their price target on MyoKardia to $84 from $77, with an outperform rating. Still, the company’s stock sank 13%.

In its statement, MyoKardia said it received about $230 million in funds from Sanofi during the collaboration, which ended its initial research term on Monday and will conclude entirely on April 1.

“Regaining worldwide rights enables us to capture the full value of the data being generated in the next 12-24 months as we prepare for the potential registration of mavacamten in obstructive hypertrophic cardiomyopathy and obtain proof-of-concept for MYK-491 in patients with dilated cardiomyopathy,” said Tassos Gianakakos, chief executive of MyoKardia. “Consolidated control over our entire portfolio allows us to make decisions about how we advance each of our therapeutic candidates in alignment with our precision medicine approach.”

The Wedbush analysts said they share MyoKardia’s enthusiasm, and have a base case that mavacamten and MYK-491 “will achieve clinical and commercial success in treating symptomatic HCM and DCM respectively.”

They also said that it’s likely that MyoKardia will “re-partner” the assets, particularly outside the US, on more favorable terms because the product candidates are in more advanced studies than they were during the initial Sanofi agreement.