Olema Pharmaceuticals (NASDAQ:OLMA) has enjoyed a substantial 213% run-up in the stock price over the past year based on the potential of its targeted therapies for women’s cancers. Encouraging test results, including with combination therapies, suggest significant future growth opportunities. Analysts are upbeat about the stock and see further upside even after the remarkable run over the past year.
Focus on Cancer Therapies
Focused on developing therapies for women’s cancers, Olema is poised to capitalize on a $5 billion market opportunity with its lead product, Palazestrant, which is now in clinical testing for certain metastatic breast cancer patients. After promising mid-stage test results, a pivotal Phase 3 study is slated to begin.
Furthermore, Olema is exploring a more significant $10 billion market opportunity, testing palazestrant as a combination therapy with other drugs to halt cancer cell growth. Olema said palazestrant showed “attractive combinability” with Pfizer’s (PFE) Ibrance, a CDK4/6 inhibitor. The company plans to announce the results of a study combining palazestrant with Novartis’ (NVS) approved drug, Kisqali.
Olema secured $180 million in financing through equity and credit facilities in Q3 2023, which management believes will ensure operational funding until 2027.
Recent Stock Activity
Shares of OLMA have ranged between a low of $3.00 and a high of $17.79 over the past 52 weeks. The firm has a 20-day moving average price of $14.20 and a 50-day moving average price of $13.60.
The share price is down over 7% year-to-date. However, with Q4 financial results imminent, that could change. Expectations are for Olema to post earnings of -$0.48 per share. Last quarter, Olema beat earnings estimates, reporting EPS of -$0.48 on estimates of -$0.51, driving the stock higher.
What is the Price Target for OLMA in 2024?
Analysts have been bullish on Olema stock. For instance, Citi analyst Yigal Nochomovitz recently initiated coverage with a Buy rating and $20 price target. The analyst thinks that Olema’s positive updates on its product pipeline have put it “on the map as a strong contender in the next-gen endocrine therapy development landscape.” He believes a recent business development deal represents a potential near-to-mid-term catalyst for the shares.
OLMA is currently rated a Strong Buy based on seven unanimous Buys assigned over the past three months. The average price target is $24.43, with a forecast range of $28 at the high and $20 at the low. The average price target represents a potential upside of 93%.
Final Thoughts
Olema has demonstrated substantial promise as a key player in women’s cancer therapies, with recent test results signifying a potential breakthrough in the market. Supported by a solid financial footing, the company is well-positioned to tap into vast market opportunities.
Despite recent downturns in share price, the bullish ratings from Wall Street analysts imply a potentially significant upside. The upcoming financial results could be a catalyst for a short-term turnaround in the stock. Still, with Olema on the verge of going to market with potentially game-changing cancer treatment, the stock’s long-term potential is worth keeping an eye on.
