On Friday, Stifel made adjustments to shares of Repare Therapeutics' (NASDAQ:RPTX) financial outlook, reducing the price target to $4 from the previous $9, while still retaining a Buy rating on the stock. Currently trading at $2.1 with a market capitalization of $91.4 million, InvestingPro analysis indicates the stock is trading below its Fair Value, with analyst targets ranging from $4 to $25.
The decision comes after evaluating the latest clinical results for Repare's combination therapy involving camonsertib (ATR) and lunresertib (PKMYT1), which showed confirmed objective response rates (ORRs) in ovarian peritoneal cancer (PROC) and endometrial cancer (EC) of 17% and 19%, respectively. These outcomes fell short of initial expectations.
Repare Therapeutics is shifting its developmental focus towards EC, planning to compare the effectiveness of lunresertib/camonsertib against the standard chemotherapy options, which include doxorubicin and paclitaxel.
According to InvestingPro data, the company maintains a strong financial position with more cash than debt and a healthy current ratio of 6.45, though it's currently burning through cash rapidly. The upcoming discussions among investors and analysts are anticipated to center on the potential success in EC and the scrutiny of the company's financial position.
The analyst noted that the KEYNOTE-755 study, which used a doxorubicin/paclitaxel control arm, demonstrated an ORR of approximately 15% and a median progression-free survival (mPFS) of around 3.8 months. These findings are comparable to the ORRs and mPFS estimates for Repare's therapy. However, it was pointed out that the KEYNOTE-775 study is not directly comparable as it involved patients who were at an earlier stage of treatment.
The decision to maintain a Buy rating is supported by the belief that a discernible drug effect could be identified in phase 3 trials, despite the removal of PROC from Stifel's financial model and an increased discount rate to reflect heightened balance sheet risk. The new price target of $4 per share takes into account these revised risk assessments.
Despite current challenges, InvestingPro rates the company's overall financial health as "GOOD" with a score of 2.69, though analysts don't expect profitability this year. InvestingPro subscribers have access to 8 additional key insights about RPTX's financial outlook and market position.
In other recent news, Repare Therapeutics has reported significant progress in its MYTHIC Phase 1 clinical trial for endometrial cancer and platinum-resistant ovarian cancer. The trial showed a 25.9% overall response rate in endometrial cancer and 37.5% in platinum-resistant ovarian cancer. Repare Therapeutics plans to initiate a Phase 3 trial for the drug combination in endometrial cancer in the second half of 2025.
Furthermore, the company has partnered with the US National Cancer Institute's Cancer Therapy Evaluation Program to advance the development of its anticancer drug camonsertib. Analyst firms Piper Sandler, Stifel, and H.C. Wainwright have maintained their positive ratings for Repare Therapeutics following these developments.
Lastly, the company has shifted its research and development focus, which is expected to result in significant annual cost savings of around $15.0 million and extend the company's cash runway into the second half of 2026.
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