RNA stock: time to buy?

On Oct. 29 Roth Capital Partners analyst Boobalan Pachaiyappan maintained his “Buy” rating and US$15.00 target on Atrium Therapeutics (Atrium Therapeutics, Stock Quote, Chart, News, Analysts, Financials NASDAQ:RNA) following the dosing of the first patient in a clinical trial evaluating its experimental treatment for a rare genetic heart condition.

Pachaiyappan said the milestone moves Atrium’s ATR 1072 treatment into human testing, with initial proof-of-concept results expected in the second half of 2027. The Phase 1/2 Corventis study is evaluating ATR 1072 in patients with PRKAG2 syndrome, a genetic cardiomyopathy affecting an estimated 1,000 to 2,000 people in the United States. ATR 1072 uses antibody-oligonucleotide conjugate technology to reduce expression of the PRKAG2 gene, which is associated with abnormal glycogen accumulation and impaired heart function.

Atrium announced Oct. 27 that it had dosed the first patient. Following a discussion with chief medical officer Steve Hughes, Pachaiyappan said the initial results should establish whether the treatment reaches heart tissue, reduces the targeted genetic activity and demonstrates an acceptable safety profile.

“We would prioritize interpretable cardiac exposure, mRNA knockdown, and safety rather than glycogen changes in an early dataset,” he said.

The trial includes three planned dose-escalation groups receiving 40, 80 and 160 milligrams, followed by an expansion involving approximately 25 patients at the selected dose.

Pachaiyappan said his discussion with management clarified that advancing between doses may not require heart biopsy results, potentially allowing the trial to progress more quickly than he previously assumed. “We feel cohorts may overlap more than our initial framework allowed,” he said.

He also argued that the company could select an appropriate dose before evidence emerges that the treatment reduces glycogen accumulation in heart tissue. “Compelling cardiac delivery and PRKAG2 mRNA knockdown in Part A could support advancement into the expansion phase (Part B) even before downstream biology is fully characterized,” Pachaiyappan said.

However, the regulatory path remains uncertain.

Pachaiyappan had previously considered myocardial glycogen reduction a potential measure supporting accelerated approval, but management indicated that relying on glycogen reduction alone would present regulatory challenges. He now sees the left ventricular mass index, a measure of heart muscle thickness, as a potentially important indicator of whether ATR 1072 can modify the disease.

“LVMI could emerge as a more important measure of disease modification, potentially alongside corroborating functional findings, pending FDA alignment,” he said.

Pachaiyappan said positive human data could also help address investor concerns following a separate Phase 3 setback involving Novartis and Avidity Biosciences’ treatment for myotonic dystrophy type 1. He said Atrium’s treatment targets a different disease mechanism, although its effectiveness still needs to be demonstrated in patients.

Atrium shares have fallen approximately 44% since their NASDAQ debut in February, compared with a 24% increase in the SPDR S&P Biotech ETF over the same period. Pachaiyappan said evidence of meaningful PRKAG2 reduction and acceptable safety in 2027 would be an important step toward rebuilding investor confidence.

The analyst continues to model potential regulatory approval in the second half of 2030 and a U.S. commercial launch in 2031, although those dates are analyst assumptions rather than confirmed company timelines.

His US$15.00 target is based on a discounted cash flow valuation that assumes a 25% probability of approval for ATR 1072 and a 15% probability for Atrium’s second experimental heart treatment, ATR 1086.

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