Fusion Pharmaceuticals has tons of upside, says Raymond James

Raymond James analyst Rahul Sarugaser maintained an “Outperform” rating on Fusion Pharmaceuticals (Fusion Pharmaceuticals Stock Quote, Charts, News, Analysts, Financials NASDAQ:FUSN) in a Tuesday client report, saying the company is breaking new ground in cancer research.

Fusion Pharmaceuticals, which is developing radiopharmaceutical drugs for cancer treatment focused on targeted alpha therapies (TATs), announced on Monday Phase 1 data to be presented at the 2023 Society for Nuclear Medicine and Molecular Imaging annual meeting. 

The trial is with FPI-1434 among patients with IGF-1R-expressing solid tumours, with Fusion having demonstrated that pre-treatment with cold antibody prior to administering radiolabeled (hot) FPI-1434 (therefore a “cold/hot” regimen) drives significantly more active drug to the tumour sites and materially improves the treatment’s safety profile and thus an overall improved therapeutic index versus Fusion’s traditional “hot only” regimen.

As a result, Fusion has decided to proceed the Phase 1 trial exclusively with the cold/hot regimen and to discontinue the hot-only dosing arm.

“We believe that the high potency of alpha emitters in place of conventional chemical toxins represents the evolution of the ADC field and is a significant and underexploited opportunity. While much is known about optimal dosing levels and paradigms for small molecule radiopharmaceuticals against well-known targets like PSMA, there is comparatively less experience for antibody-based alpha therapies in solid tumours,” said CEO John Valliant in a press release.

On the timeline, Fusion said it is currently enrolling its second cohort in the cold/hot dosing regimen at a higher dose and that it intends to report data around the end of the year. After that, the company is expecting to report data from 20-30 patients enrolled in its lead Phase 2 program in mCRPC during the first quarter 2024.

FPI-1434 is a radioligand targeted toward insulin-like growth factor 1 receptor (IGF-1R) using a humanized monoclonal antibody and Fusion’s Fast-Clear linker technology. 

In his commentary, Sarugaser said IGF-1R is a proven pan-cancer target, one which is over-expressed on the surface of a long list of cancer cells and with low expression in healthy tissues. He said that FPI-1434 is unique in that it doesn’t rely on intervention with the IGF-1R signalling pathway as other drugs do, but rather, the IGF-1R target is used to localize FPI-1434 for the deliver of 225Ac to the tumour, which simplifies the mechanism and, potentially, improves efficacy.

“This is the first industry study of its kind in radiopharmaceuticals, and demonstrates to us the strength of FUSN’s foundational and clinical R&D teams,” said Sarugaser.

With his “Outperform” rating, Sarugaser maintained a 12-month target on Fusion Pharmaceuticals of $13.00, which at press time represented a projected return of 190 per cent.