On Wednesday, Jones Trading adjusted its outlook on Aptose Biosciences (NASDAQ:APTO), lowering the price target to $5 from the previous $12, while maintaining a Buy rating on the company's stock. The adjustment comes as Aptose Biosciences shifts its development focus towards a new drug combination for treating Acute Myeloid Leukemia (AML).
The firm highlighted that Aptose's immediate strategy will concentrate on a triplet combination therapy involving tuspetinib, venetoclax, and HMA for first-line AML treatment. A pilot study for this combination is slated to begin in the summer, with initial findings expected to be presented at the American Society of Hematology (ASH) conference.
Meanwhile, the development for relapsed/refractory AML has been paused to improve strategic positioning, with data to be shared at the European Hematology Association (EHA) 2024 conference.
Jones Trading noted that if Aptose demonstrates clear clinical benefits in the first-line setting, it may lead to enhanced business development opportunities as compared to the relapsed/refractory AML setting. Still, the firm also pointed out that a capital overhang is a significant pressure point for both the stock and its clinical development progress.
The company's current cash position stands at $18.6 million, which is expected to fund operations through August 2024. Jones Trading has updated its financial model to reflect the new strategic direction towards first-line AML treatment, estimating unadjusted peak sales of approximately $250 million, assuming a 20% probability of success and a 40% market penetration among patients unfit for intensive chemotherapy.
In light of these developments and other minor changes across the model, Jones Trading reiterated its Buy rating but reduced the price target for Aptose Biosciences to $5. The firm believes that despite the lowered target, the company's stock remains a positive investment opportunity.
InvestingPro Insights
In conjunction with Jones Trading's revised outlook on Aptose Biosciences (NASDAQ:APTO), InvestingPro data and tips provide additional context for investors considering the company's stock. Aptose currently holds a market capitalization of $23.58 million, reflecting its standing in the biotech sector.
The company's financial health is a mix of strengths and concerns, as it holds more cash than debt, which is a positive sign for its balance sheet. Still, the InvestingPro Tips indicate that Aptose is quickly burning through its cash reserves and has weak gross profit margins, which are critical factors for potential investors to consider.
The company's stock performance metrics from InvestingPro show a 1-month price total return of -15.79% and a 6-month price total return of -45.39%, underscoring the volatility and challenges faced by Aptose in the market.
Moreover, the lack of profitability over the last twelve months and analysts' expectations that the company will not be profitable this year are important considerations for evaluating the company's future prospects.
For investors seeking a deeper analysis and more comprehensive tips, InvestingPro offers additional insights. There are 9 more InvestingPro Tips available for Aptose Biosciences that can help investors make more informed decisions. To access these insights and benefit from the full range of expert analysis, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at https://www.investing.com/pro/APTO.
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