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Is CytomX Stock a Buy Following Disappointing Cancer Therapy Results? Analyst Weighs In
Stock Analysis & Ideas

Is CytomX Stock a Buy Following Disappointing Cancer Therapy Results? Analyst Weighs In

An investment in a biotech company is not without risk, and last week, CytomX Therapeutics (CTMX) investors got a painful reminder of the consequences should clinical testing not go as hoped for.

Shares dropped by 40% in a single session after the data from the Phase 2 trial of experimental cancer therapy CX-2029 failed to impress.

The study was assessing the drug as a treatment for patients with either advanced squamous non-small cell lung cancer (sqNSCLC) or head and neck squamous cell carcinoma (HNSCC).

For the former group, the data showed an objective response rate (ORR) of 18.8% and a disease-control rate (DCR) of 87.5%, but for the latter there was an ORR of only 4% and DCR of 56%.

Investors were evidently disappointed, but BTIG’s Kaveri Pohlman thinks the data is promising – at least for one indication.  

While based on the readouts, the analyst lowered the POS (possibility of success) for the HNSCC market from 60% to 20%, the data in sqNSCLC looks “encouraging.”

”While these are early data and responses are still ongoing, the longest DoR of 5.6 months observed from a single responder suggests that these are meaningful responses,” the analyst said.

For comparison purposes, Gilead’s Trodelvy exhibited an ORR of 19% and a median PFS of 5.2 months in r/r mNSCLC (adenocarcinoma + squamous type). Additionally, the SOC (standard of care) treatment involves patients receiving docetaxel or doublet chemo (carbo taxol) – subject to the 1L (1st line) treatment. Docetaxel, for example exhibited an ORR ~10% in the 2L (2nd line) setting. Patients are still being enrolled for the sqNSCLC group and the company intends on providing more updates next year, but for Pohlman, the 2L market opportunity to replace docetaxel “makes sense.”

“All in all,” the analyst summed up, “We believe that these results validate the applicability of CX-2029 in the NSCLC space. Additionally, it serves as a POC (proof of concept) for the overall technology platform that holds the potential to make risky targets druggable for solid tumors.”

Accordingly, the analyst maintained a Buy rating and a $15 price target for CTMX shares, suggesting upside of a hefty 279% from current levels. (To watch Pohlman’s track record, click here)

Pohlman’s colleagues agree. All 5 other recent reviews are positive, making for a Strong Buy consensus rating. There’s plenty of upside projected too; according to the $13.17 average price target, shares will appreciate by 212% in the year ahead. (See CytomX stock analysis on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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