Versartis: Expected Growth Ahead


Summary

  • Versartis will read out data from a registrational phase 3 trial (VELOCITY) that if successful, may change the landscape of growth hormone treatment globally

  • We believe somavaratan will meet its non-inferiority primary endpoint of annual height velocity when compared with daily growth hormone

  • As the company’s only asset, this binary event has significant room for upside or downside

Investment Thesis: Versartis is a pure-play endocrine company developing a next-generation biweekly growth hormone, somavaratan. Based on our evaluation, we see somavaratan as having a good chance at meeting its non-inferiority endpoint against daily growth hormone. This, coupled with a robust safety package and a first-mover advantage gives this company a strong competitive positioning. With a pediatric market >$1B, and additional potential in adult patients, we see significant upside should this phase 3 readout positive.

Background

Versartis (NASDAQ: VSAR) is a late clinical stage biopharma company developing a long-acting version of recombinant human growth hormone (somavaratan) for more convenient and safer dosing. Somavaratan is currently being evaluated in pediatric growth hormone deficiency (GHD) and expects to release pivotal data in September 2017. The clinical need for a long-acting growth hormone is undeniable. The company has focused its pipeline...

Read the rest of our VSAR report.


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