On Wednesday, H.C. Wainwright adjusted its price target for Crinetics Pharmaceuticals (NASDAQ:CRNX), increasing it to $81 from the previous $69, while maintaining a Buy rating on the stock.
The revision comes as Crinetics reveals a new nonpeptide drug conjugate (NDC) asset, CRN09682, intended for patients with SST2-expressing tumors, including neuroendocrine tumors (NETs). This announcement was part of the company's third-quarter results.
CRN09682, the first candidate from Crinetics' innovative NDC platform, aims to selectively target and deliver cytotoxic payloads to SST2-expressing tumor cells. This approach is akin to antibody-drug conjugates (ADCs), but instead utilizes a novel small molecule in place of the antibody used in ADCs.
The NDC approach potentially offers advantages over ADCs, especially in cases where generating antibodies against G protein-coupled receptors (GPCRs) is challenging, potentially leading to new indications.
In addition to CRN09682, H.C. Wainwright's analyst noted the inclusion of several other Crinetics programs in their financial model. These include atumelnant for congenital adrenal hyperplasia (CAH) with a probability of success (PoS) assigned at 50%.
Early-stage programs were also evaluated, with a PoS for the PTH antagonist for hyperparathyroidism at 10%, and TSH antagonists for Graves' disease (GD) and thyroid eye disease (TED) at 5% each. Two obesity programs, an oral GLP-1 nonpeptide and an oral GIP nonpeptide, were each assigned a PoS of 5%.
The firm also adjusted the enterprise value to sales (EV/Sales) multiple to 5.5 times, which contributed to the raised price target. This adjustment reflects the analyst's valuation of the company's expanded pipeline and the potential market opportunities for its drug candidates.
In other recent news, Crinetics Pharmaceuticals announced significant changes in its executive team and strategic initiatives. The biopharmaceutical company disclosed the departure of James Hassard as Chief Operating Officer and his subsequent engagement as a consultant.
Additionally, the company submitted a New Drug Application for paltusotine, a novel treatment for acromegaly, based on data from 18 clinical trials.
In financial developments, Crinetics announced a $400 million underwritten public offering of common stock, aiming to support research and development activities, pre-commercialization activities, and potential acquisitions.
Analysts from Piper Sandler and Oppenheimer have maintained a positive outlook on Crinetics Pharmaceuticals, reaffirming their Overweight and Outperform ratings, respectively. This endorsement is rooted in the potential of Crinetics' drug atumelnant, which is being developed to treat conditions such as congenital adrenal hyperplasia and Cushing's disease.
Further data on atumelnant are anticipated by the end of 2024. These are recent developments in the ongoing activities within Crinetics Pharmaceuticals.
InvestingPro Insights
Crinetics Pharmaceuticals' (NASDAQ:CRNX) recent announcement of its new nonpeptide drug conjugate asset aligns with the company's strong financial position and market performance. According to InvestingPro data, Crinetics holds more cash than debt on its balance sheet, providing financial flexibility to support its expanding pipeline. This is particularly important for a company that is not yet profitable, as indicated by the negative earnings per share of -$3.75 for the last twelve months as of Q2 2023.
Despite not being profitable, Crinetics has shown impressive market performance. The company's stock has delivered a strong return of 107.85% over the past year and is currently trading near its 52-week high, with the price at 96.47% of its highest point. This performance suggests investor confidence in Crinetics' potential, possibly driven by its innovative drug development programs.
InvestingPro Tips highlight that while Crinetics is not expected to be profitable this year, it maintains strong liquidity with liquid assets exceeding short-term obligations. This financial stability is crucial for a biotechnology company investing heavily in research and development.
For investors seeking more comprehensive analysis, InvestingPro offers 13 additional tips for Crinetics Pharmaceuticals, providing a deeper understanding of the company's financial health and market position.
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