On Monday, Piper Sandler confirmed its positive stance on ALX Oncology (NASDAQ:ALXO) shares, maintaining an Overweight rating and a $21.00 price target.
The affirmation comes following the presentation of complete ASPEN-07 study data at the American Society of Clinical Oncology (ASCO) meeting. The Phase 1a study is focused on evorpacept, ALX Oncology's CD47 targeting antibody, used in conjunction with Padcev to treat patients with advanced stages of urothelial carcinoma, a majority of whom have undergone multiple prior therapies.
According to the study's findings, the combined treatment has demonstrated an objective response rate (ORR) of 59%, with 13 out of 22 evaluable patients showing responses, including 2 complete responses (CRs) and 11 partial responses (PRs). Although some responses are pending confirmation, the initial data suggests that the combination could significantly surpass the 41% ORR observed with Padcev as a single-agent treatment.
Piper Sandler underlined the potential for these results to not only present an additional revenue stream for ALX Oncology in this specific treatment scenario but also to potentially pave the way for evorpacept to be used in combination with antibody-drug conjugates (ADCs) in other settings. While the firm has not yet incorporated this opportunity into their financial models, the data is seen as a promising development for ALX Oncology's treatment pipeline.
ALX Oncology's focus on developing therapies for cancer treatment, especially through its evorpacept program, is a critical part of its strategy to address unmet medical needs in oncology. The positive preliminary results from the ASPEN-07 study provide a glimpse into the potential efficacy and applicability of evorpacept in treating urothelial carcinoma and possibly other cancers in combination with different ADCs.
InvestingPro Insights
Piper Sandler's optimism for ALX Oncology (NASDAQ:ALXO) is echoed in certain financial metrics, despite some challenges. The company's balance sheet reflects a strategic advantage, holding more cash than debt, which might provide some flexibility in its operations and research endeavors. Additionally, ALX Oncology's stock has experienced significant volatility, with a notable price uptick over the last six months, indicating potential investor optimism for its long-term prospects, despite recent downturns.
However, the InvestingPro data highlights a more nuanced picture. With a current market cap of 553.82 million USD and a negative P/E ratio of -2.94, investors are clearly expecting future growth rather than present earnings. This forward-looking optimism is further underscored by a PEG ratio of 0.21, suggesting that the company's earnings growth potential is being factored into its stock price. Yet, the company's significant operating loss of -175.84 million USD over the last twelve months highlights the high costs associated with its research and development efforts.
For investors considering ALX Oncology, these metrics provide critical context to Piper Sandler's rating. For those seeking deeper analysis, there are additional InvestingPro Tips available, which include insights on the stock's technical indicators and analysts' profitability expectations. Prospective investors can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, gaining access to an extensive array of tips and data to inform their investment decisions.
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