None of the companies just mentioned have generated any meaningful revenue, and some may be many years away from reaching revenue-generating status. So, while these companies, including TORC, have intriguing potential, the current strength in these names speaks more to investor's appetite and willingness to take on risk, rather than any true fundamental catalyst.
Speaking of catalysts, TORC may have one lined up for today as its quiet period expires, allowing investment banks involved with its IPO to publish research and estimates for the first time. As we discuss below, the analyst community is decisively bullish on the name with a couple of the initiations featuring eye-popping price targets.
Before delving into those initiations, we first wanted to provide some background on the company:
TORC is a clinical-stage biopharma focused on treating age-related diseases. Its lead program has demonstrated in several clinical trials the potential to treat multiple diseases of aging for which there are no approved therapies. The decline in immune function that occurs during aging, or immunosenescence, increases susceptibility to a variety of diseases, including respiratory tract infections (RTIs).
TORC’s approach focuses on the mechanistic target of rapamycin, or mTOR, pathway, an evolutionarily conserved pathway that regulates aging, and specifically on selective inhibition of the target of rapamycin complex 1, or TORC1.
The company’s initial focus is on the development of RTB101, a TORC1 inhibitor. It’s being tested alone and in combination with other mTOR inhibitors such as everolimus as a first-in-class immunotherapy program designed to improve immune function and thereby reduce the incidence of RTIs in the elderly regardless of the causative pathogen.
TORC licensed the worldwide rights to its TORC1 program, including RTB101 alone or in combination with everolimus or other mTOR inhibitors, from Novartis in March 2017. Its TORC1 immunotherapy approach is supported by a Phase 2a clinical trial in 264 elderly subjects that provided statistically significant and clinically meaningful results. This trial demonstrated that treatment with RTB101 alone and in combination with everolimus can enhance the ability of the aging immune system to fight infectious pathogens and consequently reduce the incidence of all infections, including RTIs in elderly subjects.
The company is evaluating RTB101 alone and in combination with everolimus in a Phase 2b clinical trial for the reduction of RTIs in the elderly. Top-line data from this trial is expected in 2H18. If all goes well, TORC intends to conduct two Phase 3 pivotal trials across two hemispheres. The Phase 3 clinical program is expected to start in the southern hemisphere in 1H19 at the beginning of the winter cold and flu season and run through 2Q20. If Phase 3 trials are successful, TORC expects to file an NDA with the FDA in 2020, and a MAA with the European Medicines Agency (EMA) in 2021.
Analysts Feeling Bullish Despite Big Gains
Oftentimes, after a recent IPO has made a sizable move ahead of its quiet period, analysts will be a little more cautious in terms of their initiations. A mixed bag between bullish and neutral calls is typical. However, that is not the case with TORC. So far this morning, we see four initiations, and each one lands on the bullish side.
Among them are two that really stand out. Specifically, Wedbush initiated TORC with an Outperform and $28 target, representing 34% upside from current prices. But, the one that really caught our attention this morning was Leerink Partners Outpeform and $36 target, which is a whopping 73% higher from here.