Infinity Pharma At Risk Of AbbVie 'Walking Away'

Infinity Pharmaceuticals Inc. (NASDAQ: INFI) released the initial data for Duvelisib on June 15, which were below expectations.

Morgan Stanley’s Matthew Harrison downgraded the rating on the company from Overweight to Equal Weight, while lowering the price target from $11 to $1.

Harrison believes that due to the disappointing data, there was risk of Infinity Pharma’s partner, AbbVie Inc (NYSE: ABBV) walking away from the development of the drug.

“While there is upside if Abbvie provides a milestone payment or continues development, we see significant uncertainty,” the analyst mentioned.

DYNAMO Data

The top-line DYNAMO data for Duvelisib show an overall response rate of 46 percent, which were all partial responses, with 20 percent patient having Gr3+ infection.

Harrison pointed out that the response rate was below expectations, while the infection rate was higher than anticipated, despite prophylaxis.

Related Link: Morgan Stanley: 4 Reasons We're Downgrading Abbvie

“A suboptimal clinical profile is suggested by the combination of a lack of both a higher response rate and no CRs (complete responses),” the analyst stated, while adding that the results suggest that commercial success might be limited.

Estimate Revisions

Harrison now expects Duvelisib to receive approval for relapsed patients.

The revenue estimate for 2020 has been reduced from $370 million to $112 million, while the R&D spend estimate has also been lowered.

“The key to INFI is if Abbvie drops duvelisib (and thereby funding) or if management can get Abbvie to continue funding or provide a final payment. If management can secure funding its immediate path forward is clearer,” Harrison added.