On Tuesday, BofA Securities adjusted its outlook on Syndax Pharmaceuticals (NASDAQ:SNDX) shares, reducing the price target to $30 from the previous $31 while keeping a Buy rating on the stock.
The adjustment follows the U.S. Food and Drug Administration's (FDA) decision to extend the Prescription Drug User Fee Act (PDUFA) goal date for the company's menin inhibitor revumenib by three months, now set for December 26th. The extension is due to additional data that significantly alters the original submission package.
The analyst from BofA Securities noted that while the FDA's decision is a clear setback, the fundamental investment thesis for Syndax Pharmaceuticals remains unchanged.
The review process is expected to be relatively straightforward since additional trials and manufacturing information are not needed, according to the company's management.
However, the delay has likely come as an unexpected development to investors, particularly because the review is part of the Real-Time Oncology Review (RTOR) program, which is intended to expedite FDA engagement.
Despite the postponement, the analyst believes that approval for revumenib is still likely, supported by its Breakthrough Therapy Designation (BTD) and priority review status.
However, today's announcement has cast some uncertainty over the drug's commercial launch timeline, potentially affecting its first-mover advantage in the market. The analyst also referenced concerns about revumenib's safety profile, which have been lingering since the American Society of Hematology (ASH) meeting.
While acknowledging the altered commercial prospects, BofA Securities anticipates revumenib will still find success in a market with a high unmet need. The firm's unadjusted 2030 revenue projection for revumenib stands at $937 million, compared to the consensus estimate of $886 million. With the revised expectation of an early 2025 launch, the firm maintains its Buy rating but has adjusted the price objective to reflect the new timeline.
In other recent news, Syndax Pharmaceuticals has been in the spotlight due to several key developments. The company's drug candidate revumenib, intended for the treatment of relapsed or refractory KMT2Ar acute leukemia, has seen its approval decision by the U.S. Food and Drug Administration (FDA) delayed by three months.
This postponement, which was unexpected, is reportedly due to the need for additional analysis of data submitted after the New Drug Application (NDA). Despite this delay, financial services firm Stifel maintains a high probability of success for the drug's approval and retains a Buy rating on Syndax, although it revised its price target down to $40 from $42.
Also, Jefferies has set a Buy rating on Syndax stock with a price target of $37.00. This rating comes as the company anticipates two significant Prescription Drug User Fee Act (PDUFA) dates for its therapies revumenib and axatilimab. The company's strong cash position of $522 million, expected to last through 2026, underscores its transition to a commercial stage.
Furthermore, Syndax recently reported encouraging results from trials of revumenib, its acute leukemia drug candidate. The findings from two trials, BEAT AML and AUGMENT-102, presented at the European Hematology Association 2024 Congress in Madrid, showcased the drug's potential in combination with other therapies for treating acute myeloid leukemia (AML). The company is preparing for the expected near-term approval of revumenib and plans to initiate a pivotal trial with the BEAT AML combination by the end of 2024.
InvestingPro Insights
As Syndax Pharmaceuticals (NASDAQ:SNDX) navigates the FDA's extended review process for its menin inhibitor revumenib, investors are closely monitoring the company's financial health and market performance. According to InvestingPro data, Syndax has a market capitalization of $1.87 billion, reflecting the market's valuation of the company. Despite a challenging earnings outlook, with a negative P/E ratio of -6.6 indicating the company is not currently profitable, Syndax holds a strategic financial position, with more cash than debt on its balance sheet—an indicator of financial resilience. Additionally, the company's liquid assets surpass short-term obligations, providing flexibility as it awaits the FDA's decision.
InvestingPro Tips reveal that analysts have revised their earnings estimates upwards for the upcoming period, suggesting a potential positive shift in Syndax's financial trajectory. However, it's important to note that analysts do not expect the company to be profitable this year, and a net income drop is anticipated. Still, the company has experienced a strong return over the last five years, which could indicate underlying long-term value. For those looking to delve deeper into the metrics that could shape Syndax's future, there are 8 additional InvestingPro Tips available on Investing.com/pro/SNDX. To access these insights, consider using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, providing a comprehensive view of the market and individual stocks.
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