On Saturday, BofA Securities adjusted its stance on Perspective Therapeutics Inc (NYSE:CATX), shifting from a 'Buy' to a 'Neutral' rating. The firm also significantly reduced the price target for the company's shares to $6.00 from the previous $24.00.
The downgrade comes after Perspective Therapeutics shared recent data on its VMT-α-NET treatment. The observed objective response rate (ORR) fell short of the benchmarks established by competing products from companies such as AlphaMedix and RayzeBio.
Despite this, there remains a possibility for Perspective to achieve better outcomes at higher doses, as patients were treated below the validated 67.6 µCi/kg/dose level noted in other studies. However, any new data is not expected until late-2025 at the earliest, pending the FDA's decision to open Cohort 3 for investigation.
Additionally, initial findings for another of Perspective's treatments, VMT01, which targets melanoma, have shown complications with kidney accumulation that have hindered further dose escalation. These issues could continue to impact the company's stock performance in the near term.
Enrollment has now opened for additional combination studies for VMT01, but results from these studies are still forthcoming. With key near-term catalysts having already occurred and the market facing increasing competition, BofA Securities has chosen to lower both its rating and price objective for Perspective Therapeutics.
In other recent news, Perspective Therapeutics has been the subject of significant developments. UBS initiated coverage on the company's stock, assigning a Buy rating and setting a price target of $20.00. The company's lead program, VMT-α-NET, is anticipated to achieve peak sales of $1.2 billion according to UBS, surpassing the consensus estimate of approximately $0.5 billion. Initial Phase 1 clinical data for VMT-α-NET is expected to be released in the fourth quarter of 2024.
Oppenheimer also maintained an Outperform rating on Perspective Therapeutics' shares, following the presentation of updated data from an ongoing compassionate use study of VMT-α-NET. The company also announced initial results from its First-in-Human study of VMT01 in patients with MC1R+ metastatic cutaneous melanoma. Despite initial confusion over the results, Oppenheimer reaffirmed its Outperform rating on Perspective Therapeutics, maintaining a price target of $22.00.
Truist Securities maintained its Buy rating and $21.00 price target for Perspective Therapeutics stock, highlighting the recent investor concerns regarding dosing but suggested that the negative reaction to the melanoma data presents an opportunity for buyers. They estimate peak adjusted and unadjusted sales for the melanoma treatment could reach approximately $170 million and $850 million, respectively.
Lastly, Oppenheimer reaffirmed its Outperform rating and $22.00 price target for Perspective Therapeutics. The endorsement follows a series of discussions and presentations by CATX leadership at the Oppenheimer second annual Targeted Radiopharmaceuticals Summit earlier in the week.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on Perspective Therapeutics Inc's (NYSE:CATX) current financial situation, providing context to BofA Securities' downgrade. The company's market capitalization stands at $234.53 million, reflecting the market's reassessment of its value following recent developments.
InvestingPro Tips highlight that CATX is "quickly burning through cash" and is "not profitable over the last twelve months," which aligns with the challenges outlined in the article regarding the company's treatment development setbacks. These factors likely contribute to analysts' expectations that "the company will not be profitable this year."
The stock's recent performance has been particularly concerning, with InvestingPro data showing a 55.96% decline in the past week and a 70.32% drop over the last month. This sharp downturn correlates with the disappointing data on VMT-α-NET and VMT01 treatments mentioned in the article.
Despite these challenges, it's worth noting that CATX "holds more cash than debt on its balance sheet" and "liquid assets exceed short term obligations," which may provide some financial flexibility as the company navigates its current obstacles.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for CATX, providing a deeper understanding of the company's financial health and market position.
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