On Monday, B.Riley updated its assessment of Bicycle Therapeutics (NASDAQ:BCYC) shares, significantly reducing the biopharmaceutical company's price target from $28.00 to $17.00 while maintaining a Neutral rating on the stock.
The adjustment follows a sharp ~35% intraday drop in the company's share price, which fell to approximately $13, now hovering around its cash value. InvestingPro data shows the stock has declined over 40% in the past six months, with technical indicators suggesting oversold conditions.
The reassessment by the analyst comes after Bicycle Therapeutics presented clinical data for zelenectide pevedotin that did not meet expectations. The company's combination treatment of zelenectide pevedotin and pembro for use in first-line metastatic urothelial cancer (mUC) is reportedly showing inferior top-line results compared to the established benchmark set by the combination of Padcev and pembro, based on unconfirmed responses.
Additionally, a separate post-hoc analysis for triple-negative breast cancer (TNBC) and non-small cell lung cancer (NSCLC) failed to generate the anticipated enthusiasm. The analysis targeted patients with nectin-4 gene amplification or polysomy but was seen as having significant limitations. Post-hoc datasets are often considered statistically unreliable due to their susceptibility to data mining, with prospective studies sometimes producing differing results.
The negative investor sentiment surrounding Bicycle Therapeutics is largely attributed to these recent findings. With the current programs being viewed as NPV-negative by B.Riley, the firm sees limited potential for stock appreciation unless the company's management pivots strategically towards new targets.
According to InvestingPro analysis, while the company maintains strong liquidity with a current ratio of 17.13 and more cash than debt, it's rapidly burning through its cash reserves.
The revised price target of $17 reflects a valuation based on the company's cash position and the value of its platform. The Neutral rating suggests that the firm advises neither buying nor selling the stock at this time, indicating a wait-and-see approach until further developments potentially alter the company's trajectory.
InvestingPro analysis indicates the stock is currently undervalued, with 10+ additional ProTips and a comprehensive research report available to subscribers, offering deeper insights into the company's financial health and growth prospects.
In other recent news, Bicycle Therapeutics has experienced several significant developments. H.C. Wainwright revised its price target for the biopharmaceutical company, reducing it to $33 from the previous $55, while maintaining a Buy rating. The adjustment was influenced by a reassessment of the company's drug development pipeline, particularly the drug candidate zele.
In contrast, Morgan Stanley (NYSE:MS) maintained its Equalweight rating on Bicycle Therapeutics with a steady price target of $30, highlighting the clarity provided on the Phase 2/3 Duravelo-2 trial timing as a positive development.
B.Riley made a significant adjustment to Bicycle Therapeutics' price target, bringing it down from $28.00 to $17.00, while maintaining a Neutral rating. This followed the release of clinical data for zelenectide pevedotin, which did not meet the expectations set by the analyst. However, the firm acknowledged Bicycle Therapeutics' impressive revenue growth of 48.6% in the last twelve months.
Needham retained its Buy rating and $38.00 stock price target for Bicycle Therapeutics, anticipating promising early results for the monotherapy in patients with triple-negative breast cancer. Similarly, Leerink Partners raised the company's price target to $32.00, maintaining an Outperform rating, following the company's third-quarter financial results and pipeline progress. These are just a few of the recent developments surrounding Bicycle Therapeutics.
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