On Thursday, BofA Securities updated its outlook on Relay Therapeutics (NASDAQ:RLAY), reducing the price target to $20 from the previous $21, while reaffirming a Buy rating on the stock. Currently trading at $4.98, RLAY has shown significant momentum with a 16% gain over the past week, according to InvestingPro data. The adjustment comes after Relay Therapeutics provided a Phase 1/2 data update on RLY-2608, a treatment for second-line and beyond (2L+) breast cancer, at the San Antonio Breast Cancer Symposium (SABCS).
The new data presented by Relay Therapeutics offers a more mature analysis by 2-3 months than the previous report, including the first disclosure of median progression-free survival (mPFS) specifically for the second-line-only population. This information aims to give a clearer picture of RLY-2608's efficacy as it prepares for Phase 3 trials. InvestingPro analysis shows that 9 analysts have revised their earnings upwards for the upcoming period, suggesting growing confidence in the company's prospects.
According to the analyst's commentary, the latest results continue to demonstrate the potential of RLY-2608 to be best-in-class and support its advancement to Phase 3. The analyst's model predicts that RLY-2608 could achieve nominal peak sales surpassing $1 billion, with a 65% probability of success (POS).
The reiteration of the Buy rating and the new price objective of $20, down from $21, reflects the belief in the drug's upside potential. This is especially notable as Relay Therapeutics' stock is currently valued at an enterprise value (EV) of approximately negative $100 million, suggesting significant room for growth according to the analyst's assessment. The company maintains a strong financial position with more cash than debt and a healthy current ratio of 18.42.
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In other recent news, Relay Therapeutics has seen several significant developments. The company finalized a global licensing agreement for its FGFR2 inhibitor, lirafugratinib, with Elevar Therapeutics, a subsidiary of HLB Inc (KQ:028300). Under this agreement, Relay Therapeutics could gain up to $75 million in upfront and regulatory milestone payments, with the possibility of an additional $425 million in commercial milestone payments.
The licensing agreement follows successful clinical trials of lirafugratinib, which demonstrated significant efficacy. The drug achieved a 73% objective response rate and a median duration of response of 11.2 months in FGFRi-naïve, FGFR2-positive CCA patients treated with doses of 70mg or higher.
H.C. Wainwright and Leerink Partners recently adjusted their price targets on Relay Therapeutics, while maintaining their positive ratings. However, Oppenheimer downgraded their rating due to concerns about the selectivity profile of RLY-2608.
The U.S. Food and Drug Administration also approved Roche's Itovebi (inavolisib) for a specific breast cancer treatment, which includes Relay Therapeutics' drug candidate. This approval was based on the successful outcomes of the Phase 3 INAVO120 trial.
Relay Therapeutics' Phase 1 ReDiscover trial demonstrated promising results, leading to adjustments in analysts' outlooks.
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