Credit Suisse says this biotech stock can surge 100%, citing an opportunity in obesity-related hypertension

Published Tue, Mar 7 20236:57 AM EST

Mineralys Therapeutics is on track to succeed within the obesity-related hypertension market, which could translate into major gains for the stock, Credit Suisse said. Analyst Richard Law initiated coverage of the health-care stock with an outperform rating. Law's price target of $40 implies upside of more than 100% over the next 12 months from where it ended Monday's session. "There is a large unmet need in resistant HTN," he said in a note to clients Tuesday, adding that Mineralys has "potential best-in-class data through a targeted and methodical approach." HTN is used as shorthand for hypertension. The current standard of care involves spironolactone, a drug with side effects including breast enlargement in males and elevated potassium. But Law said data from Mineralys' trial on its oral drug lorundrostat is already showing superior results for obese patients. And, the drug is expected to succeed in clinical trials going forward, he said. Law is also optimistic that the drug can perform well in the hypertension market, particularly among obese patients. He cited conversations with cardiologists and nephrologists, who said they would be open to prescribing lorundrostat instead of generic alternatives. To be sure, there are still questions the company has yet to answer. Though results look strong, potassium levels still appear to be high with lorundrostat, Law said. More phases and further data are also expected in the coming years. Still, Law highlighted the business opportunity available, noting there could be between 7 million and 8million targetable U.S. patients, even if the drug is restricted to just obese patients with hypertension. Lorundrostat could hit peak global sales of $2.6 billion non-risk adjusted, or around $900 million risk adjusted, by 2037, he said. Law also said Mineralys is undervalued with a market cap of around $800 million. The stock could get a near-term boost from a potential partnership that comes after the official second-phase results, he said. — CNBC's Michael Bloom contributed to this report.