On Monday, Goldman Sachs adjusted its outlook on Erasca Inc (NASDAQ:ERAS), lifting the stock's price target from $6.00 to $7.00 while maintaining a Buy rating. The revision follows Erasca's fourth-quarter 2023 update, which included significant R&D advancements and financial developments.
Erasca's update 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. This additional funding, coupled with the $322 million on hand at the end of the fourth quarter, extends Erasca's operational runway from the first half of 2026 to the second half of the same year.
A retrospective pooled analysis of Phase 1b/2 data for naporafenib in combination with trametinib in NRAS mutant melanoma patients demonstrated a median overall survival of approximately 13-14 months. This outcome, based on Erasca's benchmarks, bolsters confidence in the potential success of the regimen in the upcoming Phase 3 SEACRAFT studies.
The company reaffirmed its timelines for key program milestones: SEACRAFT-1's first patient is expected to be dosed between the second and fourth quarters of 2024, initial data from HERKULES-3 for encorafenib plus cetuximab in BRAFmut colorectal cancer is anticipated in the first half of 2024, and initial dose escalation data for the EGFR inhibitor ERAS-801 in the THUNDERBOLT-1 study of recurrent glioblastoma multiforme patients is slated for 2024.
Moreover, pivotal Phase 3 SEACRAFT-2 study data for naporafenib combined with trametinib in NRAS mutant melanoma is expected in the fiscal year 2025.
Management is actively exploring ways to expedite the advancement of ERAS-4 (pan KRAS), citing preclinical data that suggests potential advantages over competing assets. The updated financial model primarily reflects changes in operating expenses. The new stock price target of $7 takes into account the increased cash balance and the extended cash runway.
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