Biopharmaceutical company SpringWorks Therapeutics (NASDAQ:SWTX) won the U.S. Food and Drug Administration’s (FDA) approval for its Ogsiveo (Nirogacestat) drug for the treatment of adult patients with progressing desmoid tumors requiring systemic treatment. SWTX stock rallied 16% in Monday’s after-hours trading.
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SpringWorks Scores FDA’s Approval
It is worth noting that SpringWorks’ Ogsiveo is the first drug that has been approved for the treatment of desmoid tumors. These tumors are a rare subtype of soft tissue sarcomas that are non-cancerous but can be locally aggressive. Interestingly, Ogsiveo was granted Priority Review by the FDA, which implies that the regulatory body would take a decision on the drug’s application for approval within six months.
Ogsiveo’s FDA approval is based on the results from the Phase 3 DeFi trial, which were published in the March 9, 2023 edition of the New England Journal of Medicine. The late-stage trial, which involved 142 patients with progressing desmoid tumors, showed that the treatment led to a 71% lower risk of disease progression or death compared to placebo.
The company said that the drug will be available to order within five to ten business days. Moreover, it expects to file a Marketing Authorisation Application for the drug with the European Medicines Agency in the first half of next year.
Analysts’ Reactions
Following the approval news, Goldman Sachs analyst Corinne Jenkins reiterated a Buy rating on SpringWorks stock with a price target of $47. Jenkins expects Ogsiveo to experience robust uptake on its launch, given the high degree of physician awareness and support for the treatment of desmoid tumors, as observed across his channel checks and the company’s market research.
Meanwhile, another SWTX bull, TD Cowen analyst Yaron Werber, told Reuters that he expects a slow and gradual launch for the drug, which would build when patients can stand therapy for a long period of time. He estimates Ogsiveo to generate U.S. sales of $3 million in 2023, $79 million in 2024, and peak sales of $544 million in 2032.
What is the Target Price for SpringWorks?
SpringWorks stock scores Wall Street’s Strong Buy consensus rating based on five unanimous Buys. The average price target of $51.67 implies about 149% upside potential. Prior to the FDA approval news, shares were down 20% year-to-date.
