On Wednesday, H.C. Wainwright adjusted the price target for Kura Oncology (NASDAQ:KURA) shares, raising it to $37.00 from the previous $32.00, while reaffirming the Buy rating on the stock. The revision comes in light of Kura's recent strategic collaboration announcement with Kyowa Kirin (TSE:4151) for the development and commercialization of ziftomenib in the treatment of acute leukemias.
The collaboration, which was publicized by Kura after the market closed on Tuesday, includes a substantial $330 million upfront payment to Kura and the possibility of up to $420 million in near-term milestone payments. These payments will be contingent upon achieving certain developmental and commercial milestones, including a payment upon the launch of ziftomenib as a monotherapy in the relapsed/refractory acute myeloid leukemia (r/r AML) setting.
H.C. Wainwright's optimism is based on several factors, including adjustments to the fully diluted share count and base year, as well as an increase in the projected chance of success for ziftomenib in AML. The firm has raised the success rate from 45% to 65%, bolstered by the clinical data available to date, the partnership with Kyowa Kirin, and comparisons to the approved competitor Revuforj, which targets the same molecule. According to H.C. Wainwright, ziftomenib demonstrates superiority over its molecular target counterpart.
The agreement with Kyowa Kirin is poised to facilitate ziftomenib's development in frontline settings and potentially expand its use beyond current indications. This strategic move could potentially enhance Kura's position in the oncology market and contribute to the company's growth prospects, as reflected in the increased price target for the company's shares.
In other recent news, Kura Oncology has reported substantial advancements in its menin inhibitor program, particularly ziptamenib's treatment for acute myeloid leukemia (AML), during its Q3 2024 earnings call. Despite a net loss of $54.4 million for the quarter, the company's financial stability is maintained with over $455 million in assets, ensuring operations can continue into 2027.
Kura Oncology also recently announced a partnership with Kyowa Kirin to further the development and commercialization of ziftomenib, another menin inhibitor. The agreement, which includes a $330 million upfront payment and up to approximately $1.2 billion in total potential milestone payments, is expected to fund and accelerate the development of ziftomenib in AML.
Jefferies has maintained a Buy rating on Kura Oncology, but reduced the stock's price target from $32.00 to $28.00, following these recent developments. The company is preparing for potential pivotal studies while also exploring other indications for ziptamenib's use and plans to report further trial results in early 2025. Kura Oncology is also developing a new candidate for diabetes treatment, expected in the first half of 2025.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on Kura Oncology's financial position and market performance. Despite the optimistic outlook from H.C. Wainwright, it's important to note that Kura's financial metrics present a mixed picture. The company's market capitalization stands at $1.24 billion, reflecting investor confidence in its potential. However, Kura is not currently profitable, with a negative P/E ratio of -6.67 and an adjusted EBITDA of -$216.64 million for the last twelve months as of Q3 2023.
On a positive note, InvestingPro Tips highlight that Kura holds more cash than debt on its balance sheet, and its liquid assets exceed short-term obligations. This strong liquidity position aligns well with the recent $330 million upfront payment from Kyowa Kirin, potentially providing Kura with additional financial flexibility to advance its drug development programs.
Interestingly, despite the current lack of profitability, Kura has seen a remarkable 70.34% price total return over the past year. This performance suggests that investors are betting on the company's future prospects, likely influenced by developments such as the ziftomenib collaboration.
For investors seeking a more comprehensive analysis, InvestingPro offers 5 additional tips that could provide further insights into Kura Oncology's investment potential.
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