On Tuesday, Goldman Sachs adjusted its price target for Erasca Inc (NASDAQ:ERAS), reducing it to $3.00 from the previous $4.00, while maintaining a Buy rating on the stock. The adjustment follows Erasca's second quarter operational and program updates, which suggest that the company's plans for upcoming data disclosures are proceeding as intended.
Erasca, which concluded the second quarter with $460.3 million in cash, is anticipated to have sufficient funds to continue operations into the first half of 2027. The financial results for the quarter included a $22.5 million expense for in-process research and development (IPR&D) and impairment charges due to changes in the pipeline program that were announced earlier.
The company's Phase 1b SEACRAFT-1 study of naporafenib in combination with trametinib in RAS Q61X solid tumors is expected to provide a potential catalyst in the fourth quarter of 2024. Additionally, Erasca initiated the Phase 3 SEACRAFT-2 study for naporafenib plus trametinib in NRAS mutant melanoma in June, with dose optimization data from the Stage 1 randomized portion expected in 2025.
Further into the pipeline, Erasca has plans for ERAS_4001, with an IND filing projected in the first quarter of 2025 and data from the BOREALIS-1 study in KRAS mutant solid tumors expected in 2026. Another program, ERAS-0015, is set for an IND filing in the first half of 2025, with data from the AURORAS-1 study in RAS mutant solid tumors also anticipated in 2026.
The revised price target to $3 reflects updates to the company's financial model, including the second quarter financial results and the impact of financing activities during the same period. Despite the lowered target, Goldman Sachs reaffirms its Buy rating on Erasca shares.
In other recent news, Erasca Inc. has seen significant developments. The company has initiated the global SEACRAFT-2 Phase 3 trial, which evaluates the effectiveness of the pan-RAF inhibitor naporafenib in combination with the MEK inhibitor trametinib in patients with NRAS-mutant melanoma.
This trial has led to an increase in the stock target by H.C. Wainwright, from $5.00 to $6.00, maintaining a Buy rating. Goldman Sachs also raised its price target for the company from $6.00 to $7.00, keeping a Buy rating intact.
Erasca has also secured exclusive licensing agreements for two experimental drugs, ERAS-0015 and ERAS-4001, aimed at treating solid tumors. This strategic move has been accompanied by a $160 million equity offering, attracting a mix of new and existing healthcare-focused investors. The company plans to file Investigational New Drug applications for ERAS-0015 and ERAS-4001 in 2025.
In governance news, shareholders elected two Class III Directors and ratified KPMG LLP as the company's independent auditor for the current fiscal year. These recent developments follow the company's fourth-quarter 2023 update, which highlighted the company's Phase 3 study plans for its primary late-stage clinical asset, naporafenib, and the completion of a $45 million private placement financing.
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