Wednesday saw a revision in the financial outlook for Xencor, Inc. (NASDAQ:XNCR) by BMO (TSX:BMO) Capital. The firm adjusted the price target for the stock to $34.00, a decrease from the previous $38.00, while continuing to uphold an Outperform rating on the stock.
This adjustment follows the company's report on its full year 2023 earnings, which included approximately $27.5 million in revenue from Johnson & Johnson (NYSE:JNJ) in the fourth quarter for the progression of XmAb antibody programs.
Xencor has recently shared data from a Phase 2 study of vudalimab as a monotherapy in metastatic castration-resistant prostate cancer (mCRPC), which showed promising efficacy among a group of patients who had undergone extensive prior treatments. The company is expected to decide on whether to proceed with vudalimab in prostate cancer treatment in the first half of 2025.
BMO Capital has expressed a continued positive outlook on Xencor, attributing its optimism to the potential of the company's internal and partnered T-cell programs to provide pipeline growth. Nevertheless, the reduced price target to $34 from $38 is a reflection of the firm's decision to remove Xencor's cytokine programs from its valuation model.
The adjustment in Xencor's price target and the maintained Outperform rating suggest that BMO Capital still sees value in the company's stock, despite the exclusion of certain programs from its financial model. The firm's commentary underscores the significance of the upcoming strategic decisions regarding the vudalimab project and the potential of Xencor's T-cell engagement platforms to contribute to the company's growth.
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