On Monday, Goldman Sachs reaffirmed its Buy rating on shares of CG Oncology (NASDAQ:CGON), with a consistent price target of $52.00. The evaluation followed new data presented by Johnson & Johnson at the 2024 European Society for Medical Oncology (ESMO) Conference, concerning the Phase 3 SunRISe-1 study of TAR-200, with or without cetrelimab, in patients with BCG-unresponsive non-muscle invasive bladder cancer (NMIBC).
The updated study results showed that the monotherapy response rate for TAR-200 remained at 83.5%, and the combination therapy achieved a 67.9% complete response (CR) rate at any time. Johnson & Johnson's presentation differed from previous ones by excluding a swimmer's plot of responses, opting instead to present duration of response data solely through Kaplan-Meier estimates. According to these estimates, there was a 57.4% estimated 12-month CR rate, a slight decrease from the previous 61.9%.
Goldman Sachs noted that Johnson & Johnson is unique in emphasizing Kaplan-Meier based duration of response data in the NMIBC landscape. The firm mentioned that the previous estimate of 61.9% was against a calculated 12-month CR rate of 39%, indicating a potential range of 12-month CR between 21% and 67%. Due to this method of presentation, Goldman Sachs finds it challenging to compare the 12-month CR rate of CG Oncology's cretostimogene directly with that of TAR-200.
Investor conversations prior to the conference had suggested that a 12-month CR rate in the high-40s to low-50s would be necessary for cretostimogene to maintain its competitive edge, considering its better safety and tolerability profile compared to TAR-200.
Goldman Sachs views the recent data update as presenting limited downside risk to CG Oncology's stock, although it anticipates that confusion regarding the interpretation of the Kaplan-Meier estimates may continue until the final study results are released. The firm's reiteration of the Buy rating reflects this perspective.
In other recent news, Johnson & Johnson has seen a flurry of activity in its operations. The company has reported significant findings from their Phase 2 SKIPPirr study, indicating a substantial reduction in infusion-related reactions in patients with advanced non-small cell lung cancer treated with RYBREVANT®. In addition, Johnson & Johnson has submitted a Biologics License Application to the U.S. Food and Drug Administration for the approval of nipocalimab, a treatment for generalized myasthenia gravis.
On the legal front, Johnson & Johnson has increased its proposed settlement amount by $1.1 billion to address lawsuits related to its talc-based products. In a separate legal matter, the company has been ordered to pay $1 billion to Auris Health shareholders for breaching a 2019 merger agreement.
In terms of executive shifts, D. S. Davis has retired from the board of directors, and Dr. Peter M. Fasolo, Executive Vice President and Chief Human Resources Officer, is set to retire with Kristen Mulholland named as his successor.
InvestingPro Insights
As Johnson & Johnson's (NYSE:JNJ) TAR-200 remains a topic of interest following the ESMO Conference, insights from InvestingPro can provide additional context for investors considering the pharmaceutical landscape. Johnson & Johnson, a prominent player in the industry, has demonstrated a consistent commitment to shareholder returns, having raised its dividend for 54 consecutive years. This signals a stable financial position and a management team that prioritizes returning value to shareholders.
Furthermore, Johnson & Johnson trades at a P/E ratio of 10.61, suggesting value relative to near-term earnings growth, and the company's stock typically exhibits low price volatility. With a market capitalization of $398.45 billion and a robust revenue growth of 5.13% over the last twelve months as of Q1 2023, Johnson & Johnson maintains a strong position in the market. These InvestingPro Data metrics, coupled with the fact that JNJ's cash flows can sufficiently cover interest payments and the company operates with a moderate level of debt, provide a comprehensive financial picture for investors.
For those seeking more detailed analysis and additional insights, there are 11 more InvestingPro Tips available on Johnson & Johnson, which can be found at https://www.investing.com/pro/JNJ. These tips offer a deeper dive into the company's financial health and market position, aiding investors in making informed decisions.
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