On Monday, Piper Sandler initiated coverage on Sykes Enterprises (NASDAQ:SYKE) (OTC:SKYE), a biopharmaceutical company, with an Overweight rating and a price target of $12.00. Sykes Enterprises is currently focused on the development of nimacimab, a peripherally-restricted CB1 antibody aimed at treating obesity by restoring leptin sensitivity and boosting fat metabolism.
The coverage initiation comes as Sykes plans to begin a Phase II study of nimacimab, with or without semaglutide, in obese patients around the middle of 2024, with results anticipated in 2025. The company's strategy to develop an antibody that promotes muscle-sparing weight loss without psychiatric adverse effects (AEs) is seen as having significant market potential.
In addition to obesity treatment, Sykes Enterprises is also conducting a Phase IIa study of an eye drop formulation of CB1 agonist SBI-100 for the treatment of glaucoma, with data expected in the first half of 2024. This expansion into ophthalmic treatment represents another avenue of potential growth for the company.
Recently, Sykes has improved its financial position by issuing 11.82 million shares at $2.305 each and 9.98 million pre-funded warrants. This capital raise has increased the company's pro forma cash to approximately $51.6M, which is expected to fund operations into 2026. This financial runway covers multiple data readouts, providing the company with a solid foundation for its ongoing research and development activities.
The positive outlook from Piper Sandler is partly based on the validation of Sykes' mechanism of action by Novo Nordisk (NYSE:NVO)'s acquisition of Inversago for $1.075B. This acquisition underscores the market's interest in novel treatments for obesity, potentially boding well for Sykes Enterprises' nimacimab.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.