Wedbush Sees Denifanstat as Front-Line Acne Therapy with 249% Upside Potential
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Disclosures for WedBush, Sagiment Biosciences Inc., May 1, 2026

Wedbush Securities does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Please see pages 2–4 of this report for analyst certification and important disclosure information.

Valuation We use a discounted earnings model, a clinical NPV model (25xPE & 25% discount rate for both) and a DCF model (12% WACC & 0% perpetual growth rate) to reach our $28 PT on SGMT shares Company Description Sagimet Biosciences is developing fatty acid synthase (FASN) inhibitors for diseases caused by disruption of metabolic pathways: danifanstat for MASH patients with F4 fibrosis will enter Ph1 in 2H25 and TVB-3567 for acne will enter Ph2 in 2026. Risks to the Attainment of Our Price Target and Rating: Sagimet Biosciences is a clinical stage biotechnology company. It faces all the standard risks for this industry, including unexpected outcomes from clinical readouts, regulatory uncertainty, competition risks, commercial risks, manufacturing risks, and financial risks. Analyst Certification I, Yun Zhong, certifies that the views expressed in this report accurately reflect my personal opinion and that I have not and will not, directly or indirectly, receive compensation or other payments in connection with my specific recommendations or views contained in this report. Mentioned Companies Investment Rating System: OUTPERFORM: Expect the total return of the stock to outperform relative to the median total return of the analyst's (or the analyst's team) coverage universe over the next 6-12 months. NEUTRAL: Expect the total return of the stock to perform in-line with the median total return of the analyst's (or the analyst's team) coverage universe over the next 6-12 months. UNDERPERFORM: Expect the total return of the stock to underperform relative to the median total return of the analyst's (or the analyst's team) coverage universe of the next 6-12 months. 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On May 1, 2026, Dr. Yun Zhong of Wedbush Securities reiterated an Outperform rating and US$28.00 price target on Sagimet Biosciences Inc. (SGMT:NASDAQ), implying approximately 249% upside from the May 1, 2026, closing price of US$8.03, following a key opinion leader (KOL) webcast discussing denifanstat (deni) in acne treatment.

KOL Highlights Deni's Differentiated Profile

The KOL participating in SGMT's webcast reinforced the analyst's view that deni's unique mechanism of action (MOA), combined with proven efficacy and safety data from a completed Phase 3 study in China, positions it as a potential front-line therapy for moderate to severe acne.

The KOL emphasized deni's dual effect on reducing sebum production and inflammation — the two primary drivers of acne — as well as the convenience of once-daily oral dosing. The KOL sees the current standard of care, oral antibiotics combined with topical retinoids, as leaving sebum production unaddressed, and expressed concern about chronic antibiotic use given resistance risks. Deni was viewed as fitting into the treatment paradigm by improving outcomes while reducing unnecessary antibiotic use.

On market adoption, the KOL indicated that most patients — except those already on oral isotretinoin for the most severe cases, such as cystic scarring acne — would be eligible for deni. While prior authorization will likely be required, as is the case for virtually all branded acne therapies, the KOL noted that physicians are accustomed to the process and that success rates in securing payer coverage have been high, given that most clinic patients present with acne uncontrolled by over-the-counter products.

US Phase 3 Study Design and Timeline

Based on FDA agreement, the planned U.S. Phase 3 registrational study will enroll approximately 800 patients, randomized 2:1 to receive deni at 50mg or placebo over 12 weeks. The study is expected to begin in the second half of 2026 upon IND clearance. Notably, the trial will include adolescent patients aged 12 to 17, which the analyst views as reflecting the FDA's comfort with deni's safety profile.

Management expressed confidence in faster enrollment compared to the China Phase 3 study, which enrolled 480 patients in roughly nine months but was intentionally slowed due to capital constraints. Top-line data are expected by year-end 2027, supporting an NDA submission in 2028 via a rolling process beginning with 12-week data. Long-term extension data through an additional 40 weeks of treatment from at least 100 patients aged 12 to 17 will be required to include the adolescent age range in the label.

Pipeline and Strategic Development

SGMT's broader clinical development plan for acne includes TVB-3567 entering a Phase 2 proof-of-concept study in the second half of 2026, as well as a topical formulation intended to provide patients with an additional treatment modality. The company is also developing danifanstat for MASH patients with F4 fibrosis, which is expected to enter Phase 1 in the second half of 2025.

Valuation and Risks

Wedbush's US$28.00 price target is derived using a discounted earnings model, a clinical NPV model (25x PE and 25% discount rate), and a DCF model (12% WACC and 0% perpetual growth rate).

As a clinical-stage biotechnology company, SGMT faces standard industry risks, including unexpected clinical outcomes, regulatory uncertainty, competition, commercial execution, manufacturing, and financial risks.