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Interest in  GENTING 3182 GENTING BERHAD spurred by progress in Alzheimer's treatment

KUALA LUMPUR: At 9.43am, Genting Bhd's stock was down eight sen or 1.53% to RM5.16 a share, trimming the previous session's steep gains that were underpinned by TauRx Pharmaceuticals Ltd's progress in the development of a drug for Alzheimer's disease.

Genting had seen a surge in investor interest as 20.3%-owned TauRx, a global leader in tau-based research, released optimistic data from the Phase 3 clinical trial of an oral drug for Alzheimer's disease called HMTM.

The FBM KLCI blue-chip ended Wednesday's session 49 sen or 10.3% higher at a seven-month high of RM5.24 on the back of 89.15 million units traded

"The output indicates that participants receiving HMTM decline at a rate substantially less than is typical in Alzheimer's based on published research.

"This was seen for both cognitive and functional endpoints across a broad range of severity from mild cognitive impairment (MCI) to moderate Alzheimer's. Importantly, the safety profile is favourable and consistent with previous studies," said TauRX executive chairman and co-founder Professor Claude Wischik in announcing its clinical trial findings on Wednesday.

"Our data analysis is ongoing and will be reported at a later date. We look forward to providing an update on our progress on 9th June 2022 at the 35th Global Conference of Alzheimer's Disease International," he added.

Offering its take on the development, RHB Research said TauRx's press release did not represent positive top-line results for the trial, dubbed LUCIDITY, but expects it to put HMTM in a favourable spot to receive the necessary regulatory approvals.

According to TauRx's COO, if the trial shows positive top-line results, it could pave the way to accelerated regulatory review and approvals, and the subsequent market launch of the drug, which could be by late-2023.

"We are positive on this development as it marks a step forward for TauRx to potentially bring HMTM to the market, providing greater visibility to its path to profitability," said RHB.

The research firm said it believes the Street, like itself, has yet to factor TauRx into Genting's valuations, which offers upside to the consensus target price.

It cited a March 2018 news report that TauRx claimed a US$2.5bil valuation, while the company COO said in May 2021 that it had secured an investment of about US$700mil to fund its research.

"Assuming a valuation range of US$700mil-2.5bil, Genting’s 20.3% stake could be worth 16-58 sen per share, representing a 3-9% enhancement to our current target price," said RHB.

However, the research firm said it chose not to include TauRx in Genting's sum-of-parts valuation for now, pending greater clarity on its valuations.

It maintained its "buy" call on the stock with a target price of RM6.37, which offers 22% upside to the closing price on Wednesday.


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