On Tuesday, Oppenheimer adjusted its outlook on NuCana (NASDAQ:NCNA), reducing the price target to $25.00 from the previous $150.00 while maintaining an Outperform rating. The revision follows last Thursday's announcement that the Phase 2 NuTide:323 trial would be discontinued. The trial was evaluating NUC-3373 in combination with other agents for the treatment of second-line metastatic colorectal cancer but was halted due to futility concerns.
The discontinued trial was assessing the efficacy of NUC-3373 combined with leucovorin, irinotecan, and bevacizumab compared to the standard-of-care FOLFIRI with bevacizumab. The decision to stop the trial was unexpected by the firm, given previous supportive progression-free survival (PFS) signals in the colorectal cancer setting.
Following this development, Oppenheimer's attention has shifted to another of NuCana's investigational drugs, NUC-7738. This ProTide transformation of 3'-deoxyadenosine is currently being evaluated in solid tumors and in combination with Keytruda for melanoma treatment.
The firm is anticipating the upcoming presentation of updated Phase 2 results on NUC-7738 at the European Society for Medical Oncology (ESMO) conference, which will build on promising data previously presented in April at the American Association for Cancer Research (AACR).
The revised price target reflects the setback from the halted trial but also considers the potential of NUC-7738. The note from Oppenheimer also mentions NuCana's limited cash runway, which is an important factor for the company's operations going forward.
In other recent news, NuCana plc faced a setback as it halted its Phase II NuTide:323 study, which was evaluating NUC-3373 for the treatment of second-line colorectal cancer. The decision was based on the steering committee's assessment that the study was unlikely to demonstrate superiority in progression-free survival. This led to a downgrade in NuCana's stock rating by William Blair from Outperform to Market Perform, reflecting reduced confidence in the company's ability to deliver on its pipeline promises.
In contrast, Oppenheimer significantly raised its price target on NuCana's shares, maintaining an Outperform rating. This decision was in anticipation of NuCana's randomized Phase 2 trial in metastatic colorectal cancer, which could potentially validate the effectiveness of NUC-3373 over traditional treatments.
In addition to these developments, NuCana reported approximately $15 million in cash at the end of the second quarter, which was expected to fund operations into the first quarter of 2025. NuCana continues to advance its ProTide technology, with ongoing studies such as NuTide:303 and NuTide:701 unaffected by the recent development.
In other company news, Virax Biolabs Group Ltd announced the resignation of Chief Technical Officer (CTO) and board director Mark Ternouth, and the appointment of Dr. Nigel McCracken, the company's Chief Operating Officer (COO), to the board. NuCana also regained compliance with the Nasdaq's minimum bid price requirement, following an adjustment in the ratio of its American Depositary Shares (ADSs) to ordinary shares.
InvestingPro Insights
In light of Oppenheimer's revised outlook on NuCana (NASDAQ:NCNA), a closer examination of the company's financial health and stock performance may offer additional context for investors. NuCana's market capitalization stands at a modest $8.22 million, indicating a relatively small-scale operation within the biotech industry. The company's price to earnings (P/E) ratio is currently negative, at -0.5, reflecting the market's expectations of future losses. This is further underscored by an adjusted P/E ratio for the last twelve months as of Q2 2024 at -0.23, suggesting that the company's earnings outlook has not improved over this period.
InvestingPro Tips highlight two critical aspects for NuCana: the company is noted to be quickly burning through cash, and it does not pay dividends to shareholders. These factors are particularly relevant given Oppenheimer's mention of NuCana's limited cash runway. The stock's recent performance also paints a challenging picture, with a one-week price total return showing a significant decline of 52.77%, although there has been a slight uptick of 3.68% over the past month. The absence of dividends could affect investor sentiment, especially in the context of the stock's high volatility and recent price declines.
For those interested in a deeper dive into NuCana's performance and future outlook, there are additional InvestingPro Tips available on the platform, which could provide further guidance in evaluating the company's prospects.
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