In a major breakthrough in cancer research, in a prospective phase 2 study, 18 rectal cancer patients saw their tumors completely vanish after taking the drug dostarlimab for six months. Cancer was undetectable in follow-up tests by endoscopy, PET and MRI scans, positron emission tomography, or physical exam!
Dr. Luis A. Diaz of Memorial Sloan Kettering Cancer Center, where the study was carried out, said, “This is the first time this has happened in the history of cancer.”
Dostarlimab is a monoclonal antibody that is marketed under the brand name Jemperli. The drug was approved in the U.S. and the E.U. in April 2021 for treating recurrent or advanced endometrial cancer with deficient mismatch repair (dMMR).
AnaptysBio (ANAB) created Jemperli by using its proprietary somatic hypermutation (SHM) antibody platform. It was further developed by Tesaro, which is now a part of GlaxoSmithKline (GSK) under collaboration. While Jemperli was ANAB’s first antibody to receive approval, the company has multiple therapeutic antibodies under development.
The drug is also being evaluated for multiple tumor types and cancers. These include platinum-resistant ovarian cancer, non-small cell lung cancer, multiple myeloma, and melanoma. GSK is also developing additional antibodies with ANAB, and the latter can receive about $1.1 billion in aggregate milestone payments under the collaboration. Future royalties to ANAB on Jemperli sales range from 8% to 25% of global net sales.
In comparison, the market capitalization of ANAB currently stands at $558.6 million and it had a cash balance of $597 million at the end of the first quarter.
The company also has cobolimab and GSK4074386, two more products that are being advanced under its collaboration with GSK. Additionally, ANAB also has a collaboration with Bristol-Myers Squibb (BMY). At present, BMY is advancing two ANAB-generated anti-inflammatory antibody programs.
Analyst’s Take
H.C. Wainwright’s Michael King has reiterated a Buy rating on ANAB alongside a price target of $46. Overall, the Street has a Hold consensus rating on ANAB based on two Buys and a Hold and a Sell each. The average ANAB price target of $39.67 implies a 72.70% potential upside.
The Street has a consensus Hold rating on GSK as well, alongside an average price target of GBp 1,809.91, which implies a 4% potential upside. J.P. Morgan’s James Gordon has reiterated a Hold rating on the stock alongside a GBp 1,900 price target, implying a 9.17% potential upside.
Closing Note
This development is a miraculous breakthrough, but a trial on a larger scale would be required to detect if the results are achieved across a larger number of patients. Both ANAB and GSK stocks are already on the move, having risen 15.9% and 3.4%, respectively, on Tuesday.
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