Argenica Therapeutics (ASX:AGN) phase 2 trial of ARG-007 showed strong safety and a meaningful efficacy signal in a key high-risk subgroup, materially de-risking the program and supporting partnering potential, Euroz Hartleys said in a note on Thursday.

The company shared phase 2 results showing ARG-007 was safe but did not reduce infarct volume overall in acute ischemic stroke patients.

It further added that, in a pre-specified subgroup with slow collateral blood flow, which includes about 30% of participants and represents a third of large vessel occlusion strokes, ARG-007 reduced brain injury by 15%.

The firm shared that despite missing broader efficacy goals, ARG-007 showed a meaningful effect in a pre-specified high-risk subgroup and has a strong safety profile supporting a planned phase 2 trial before moving to phase 3.

The firm has issued a speculative buy recommendation for Argenica Therapeutics with a per-share target price of AU$1.40, which is currently under review.