On Thursday, Goldman Sachs reaffirmed their Buy rating on shares of CG Oncology (NASDAQ:CGON), maintaining a $52.00 price target. The endorsement follows new preliminary data released by a competitor in the oncology space. The competitor, not covered by Goldman Sachs, announced outcomes from its LEGEND study focusing on a treatment for high-risk, BCG-unresponsive non-muscle invasive bladder cancer (NMIBC). The results indicated a 71% complete response rate at any time, a 67% rate at three months, and a 47% rate at six months.
CG Oncology's competing drug, cretostimogene, has demonstrated a 43% 12-month complete response rate in a larger cohort. Analysts at Goldman Sachs suggest that these figures could potentially improve, with estimates ranging from 37% to 51%. They noted the decreasing efficacy over time in the competitor's trial, with the six-month complete response rate dropping to 47% from 67% at three months.
The competitor's study is still in its early stages, with additional patients yet to be evaluated. An amendment to the FDA protocol is planned, which could potentially increase the complete response rates by allowing reresection and reinduction at three months.
Despite a favorable safety profile with no discontinuations and a 5% rate of Grade 3 adverse events, the Goldman Sachs analyst pointed out that the competitor's treatment has a higher rate of serious side effects compared to CG Oncology's cretostimogene, which reported no Grade 3 or higher adverse events.
Key opinion leaders in the field have emphasized that efficacy will be a significant factor in determining the prioritization of drugs, along with ease and frequency of administration, reimbursement issues, and necessary infrastructure investment. The competitor's treatment is expected to reach a Biologics License Application (BLA) filing by mid-2026, with more data anticipated in 2025.
In conclusion, Goldman Sachs maintains a positive outlook on CG Oncology's prospects, citing a competitive clinical profile and development timeline. The final analysis from the BOND-003 trial is expected by the end of 2024, with results likely to be presented at the Society of Urologic Oncology meeting in December 2024.
In other recent news, CG Oncology has been the focus of several analyst firms. H.C. Wainwright maintained its Buy rating with a $75.00 price target, emphasizing the strong safety profile of CG Oncology's cretostimogene treatment for NMIBC. The firm highlighted the 0% Grade 3+ treatment-related adverse events and discontinuation rates, which are significantly lower than those of competitor treatments.
In addition, Roth/MKM issued a Buy rating for CG Oncology with a $65.00 price target, citing the potential of cretostimogene, which is expected to be submitted for a Biologics License Application in 2025. The firm pointed out the drug's tolerability as a key advantage, which could enable it to capture market share from competing treatments.
Furthermore, Goldman Sachs upgraded CG Oncology following encouraging clinical trial data, which increased the success probability in treating high-risk non-muscle invasive bladder cancer from 75% to 85%. The firm anticipates that the robust 12-month and duration of response findings will meet approval standards, reducing the risk of a negative outcome for the complete BOND-003 study, set to conclude later this year.
InvestingPro Insights
As CG Oncology (NASDAQ:CGON) navigates the competitive landscape of oncology treatments, a look at the company’s financial health and market performance provides additional context to Goldman Sachs' Buy rating. According to InvestingPro data, CGON holds a market capitalization of $2.57 billion, underscoring its significant presence in the biotech sector. Despite challenges highlighted by a negative P/E ratio, which stands at -7.04, analysts remain optimistic about the company's sales growth in the current year, as one of the InvestingPro Tips indicates. This optimism is in line with Goldman Sachs' analysis of CG Oncology's clinical trial prospects.
Another InvestingPro Tip that complements the article's narrative is the acknowledgment that CGON has more cash than debt on its balance sheet, suggesting a level of financial stability that may support ongoing research and development efforts. This could be particularly relevant as the company progresses towards the final analysis from the BOND-003 trial, with results expected to be a key driver for the stock. The InvestingPro platform offers additional insights, listing a total of nine tips for CGON, which interested readers can explore for a more comprehensive investment analysis.
While CGON does not pay a dividend, indicating a reinvestment strategy into its growth and development, the company has shown a strong return over the last three months, with an 18.61% price total return. This performance may reflect investor confidence in the face of upcoming trial results and regulatory milestones. With these financial metrics and InvestingPro Tips in mind, stakeholders can better understand the potential and risks associated with CG Oncology's market position and future outlook.
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