On Thursday, H.C. Wainwright maintained its Buy rating and $21.00 price target for ORIC Pharmaceuticals (NASDAQ:ORIC). The firm's decision follows a review of competitor Ipsen's (IPSEY) Phase 1b/2 trial results, which were presented at the European Society for Medical Oncology (ESMO) 2024 conference. The trial compared the efficacy of tazemetostat and enzalutamide against enzalutamide alone in patients with metastatic castration-resistant prostate cancer (mCRPC) who had previously progressed on abiraterone acetate.
The results from Ipsen's trial showed a radiographic progression-free survival (rPFS) of 16.6 months for the combination treatment versus 13.8 months for the control arm. Despite the positive outcome, H.C. Wainwright cautioned that the control arm's performance was notably better than historical controls for enzalutamide post-abiraterone, which typically show an rPFS of 4-6 months. The firm suggested that the patient population's characteristics, such as potentially more indolent disease, could have influenced the results.
H.C. Wainwright also advised against comparing these results to those of Pfizer (NYSE:PFE)'s mevrometostat in Phase 1, citing differences in patient populations and baseline disease measurability. The firm emphasized the lack of complete details, which prevents a full analysis of the competitor's results.
In the statement provided by H.C. Wainwright, the firm reiterated its confidence in ORIC Pharmaceuticals by maintaining its Buy rating and price target of $21. The firm's position remains unchanged despite the new data presented by Ipsen at the recent ESMO conference.
In other recent news, ORIC Pharmaceuticals has been at the center of several significant developments. The company has initiated dosing of ORIC-944, its lead product, in a Phase 1b trial for metastatic prostate cancer. This trial, in collaboration with Bayer (OTC:BAYRY) and Janssen Research & Development, aims to evaluate the safety and efficacy of the drug in combination with others.
Furthermore, the company has revealed plans for ORIC-944 to enter phase 3 trials in 2025, as highlighted by Stifel, which initiated coverage on ORIC Pharmaceuticals with a Buy rating and a price target of $20. Stifel also emphasized the company's potential in the market for prostate cancer treatments and the favorable risk/reward scenario for investors.
In addition to ORIC-944, ORIC Pharmaceuticals is developing a second asset, an EGFR TKI, which is expected to provide interpretable phase 1b data in the first half of 2025. Citi has also adjusted its price target for ORIC from $15 to $14, maintaining a 'Buy' rating, following insights into these future clinical developments.
Lastly, Oppenheimer revised down ORIC's price target from $17 to $15 ahead of the company's fourth fiscal quarter results, maintaining an Outperform rating. The projections include a year-over-year increase of 5.9% and a quarter-over-quarter rise of 5.6%.
InvestingPro Insights
In light of H.C. Wainwright's maintained Buy rating on ORIC Pharmaceuticals, current InvestingPro data and tips offer additional context for investors. ORIC boasts a strong cash position, holding more cash than debt on its balance sheet, which is a reassuring sign for financial stability. Additionally, the company's liquid assets exceed its short-term obligations, indicating a solid short-term liquidity position. However, it's important to note that analysts have revised their earnings downwards for the upcoming period and do not expect the company to be profitable this year. In terms of market performance, ORIC has shown a significant return over the last week, with a 17.77% price total return, and an even more impressive return over the last three months at 48.61%.
InvestingPro Tips highlight that while ORIC has experienced these strong returns, the company suffers from weak gross profit margins and has not been profitable over the last twelve months. Investors should also be aware that ORIC does not pay a dividend, which could be a consideration for those seeking income-generating investments. For those interested in delving deeper, there are additional InvestingPro Tips available at https://www.investing.com/pro/ORIC, providing further guidance and analysis.
Key InvestingPro Data metrics as of Q2 2024 reveal a market cap of approximately $752.69 million, with a negative P/E ratio of -6.11, suggesting that the market may have concerns about future earnings potential. The price/book ratio stands at 2.49, which can offer insight into how the market values the company's net assets. With the next earnings date set for November 4, 2024, investors will be keen to see if the company's strategic initiatives will start to reflect in its financial outcomes.
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