On Wednesday, Leerink Partners showed confidence in shares of Centessa Pharmaceuticals (NASDAQ:CNTA), raising the stock's price target to $24 from $22 while maintaining an Outperform rating. The firm's updated model reflects a more optimistic view on Centessa's product pipeline, particularly the ORX750 program.
The adjustment follows Centessa's announcement on November 12 of a promising update to its Phase 1 ORX750 program, which targets orexin receptor 2 (OX2R) agonists. This news was bolstered by the discontinuation of a similar orexin candidate by a competitor on November 19, which was expected to complete its primary phase by October 23, 2024.
Leerink Partners has increased its projections for Centessa's total company sales in 2032 by 4%, from $1.2 billion to $1.3 billion, and earnings per share (EPS) by 18%, from $4.42 to $5.21. The positive developments in the ORX750 orexin franchise have significantly offset the discontinuation of the hemophilia B program, SerpinPC.
The firm has also raised the probability of success (POS) for ORX750 from 60% to 65% and adjusted the 2032 sales forecast for the drug from $600 million to $1.3 billion. They now anticipate ORX750 to launch in 2028 for all three indications—narcolepsy types 1 and 2, and idiopathic hypersomnia—and to achieve market shares of 12%, 8%, and 8% respectively in these markets by 2032.
Investors are advised to watch for further developments, including additional Phase 1 data on ORX750 in healthy volunteers expected in early 2025, Phase 2a data in narcolepsy and idiopathic hypersomnia in 2025, and updates on other pipeline candidates. Leerink Partners reaffirmed their positive stance on Centessa Pharmaceuticals shares, emphasizing the potential of the ORX750 program.
In other recent news, Centessa Pharmaceuticals has been the focus of several significant updates. Guggenheim has raised its price target for Centessa to $28, maintaining a buy rating based on strategic developments, particularly updates for ORX750. The firm anticipates data from the next phases of development, including a Phase 2a trial covering all three subsets of narcolepsy, to be available in 2025.
Centessa is also actively working to strengthen its competitive edge by revealing a third orexin agonist aimed at addressing unmet needs in neuro-psychiatric disorders. Meanwhile, BMO Capital Markets maintained its Outperform rating and a $35.00 price target for Centessa, based on new data for ORX142, which supports the company's leading position in the orexin agonist market.
Oppenheimer also maintained its positive stance on Centessa with an Outperform rating and a steady price target of $24.00, buoyed by promising preclinical data for ORX142. Finally, Morgan Stanley (NYSE:MS) upgraded Centessa to Overweight from Equalweight, raising the price target to $26, following the promising interim Phase 1 results of the company's ORX750 study. These recent developments highlight Centessa's ongoing efforts in the pharmaceutical industry.
InvestingPro Insights
Centessa Pharmaceuticals' recent positive developments are reflected in its market performance. According to InvestingPro data, the company has seen a strong return over the last three months, with a 40.02% price total return. This aligns with the optimistic outlook presented by Leerink Partners.
InvestingPro Tips highlight that Centessa holds more cash than debt on its balance sheet, which could provide financial flexibility as it advances its promising ORX750 program. Additionally, analysts anticipate sales growth in the current year, supporting the firm's increased projections for Centessa's future sales.
It's worth noting that while the company's potential looks promising, it's not currently profitable. An InvestingPro Tip indicates that analysts do not anticipate the company will be profitable this year, which is typical for biotech companies in the development stage.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Centessa Pharmaceuticals, providing a deeper understanding of the company's financial health and market position.
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