Brean Assumes SCYNEXIS Shares At Buy, Sees 300% Upside

Brean Capital assumed coverage of SCYNEXIS Inc (NASDAQ: SCYX) with a Buy rating and target price of $16, implying a potential upside of 313 percent.

Scynexis is focusing on the unmet needs surrounding resistant fungal infections. Its lead product candidate, SCY-078, is triterpene glucan synthase inhibitor, with potential for step down treatment in invasive candidiasis (IC) and invasive aspergillosis (IA).

In trials, SCY-078 has showed potent and broad spectrum anti-fungal activity, importantly against echinocandin-resistant strains, and a promising safety profile.

"We expect US and EU launches for IC and IA indications in 2019 and 2020 respectively, as well as a 2020 launch for SCY-078 vs. vulvovaginal candidiasis (VVC)," analyst Difei Yang wrote in a note.

Yang sees peak year revenue in the $300 million range with better-than-average success in product development.

The near-term catalysts include readout of Phase I trial identifying an optimal IV formulation of SCY-078 in November 2016 and the FDA meeting expected in the fourth quarter 2016/first quarter 2017.

Investors should also look for the initiation of a Phase 3 trial for refractory invasive fungal infections (rIFI) in the fourth quarter, and the anticipated first quarter initiation of the Phase II IC study. The top-line data from both studies are expected in the fourth quarter of 2017.