Wednesday, Jones Trading increased its stock price target for Day One Biopharmaceuticals (NASDAQ:DAWN) to $38.00, up from the previous $35.00, while maintaining a Buy rating on the stock. The firm's decision follows the U.S. Food and Drug Administration's (FDA) approval of Day One Biopharma's flagship drug, OJEMDA (tovorafenib), for use in a specific cancer treatment.
The FDA has endorsed OJEMDA for the treatment of relapsed or refractory low-grade glioma in patients six months of age or older who have either BRAF alterations or V600E mutations. This approval has led Jones Trading to increase the probability of success (POS) in the indicated patient population to 100%.
In addition, the price of the drug has been raised to $33,900 per month from the previous $28,000, factoring in a 20% gross-to-net discount and accounting for a 20% patient assistance program (PAP) contribution.
Jones Trading's analyst noted that with the FDA approval, the peak adjusted sales forecast for OJEMDA has been increased to approximately $900 million by the year 2033, up from the earlier projection of $750 million. This significant upward revision reflects the increased confidence in the drug's market potential following regulatory approval.
The modification of the sales outlook and drug pricing has prompted minor adjustments throughout Day One Biopharma's financial model. These updates underpin the revised price target of $38.00, as the firm reiterates its Buy rating, signaling confidence in the company's growth prospects following the recent FDA approval.
InvestingPro Insights
In light of Jones Trading's recent price target increase for Day One Biopharmaceuticals (NASDAQ:DAWN), additional insights from InvestingPro can provide a broader perspective on the company's financial health and market performance. With a market capitalization of $1.37 billion and a negative P/E ratio reflecting the company's lack of profitability over the last twelve months, Day One Biopharma's financial landscape is complex.
Despite the FDA approval potentially boosting the company's future prospects, InvestingPro Tips indicate that analysts have revised their earnings downwards for the upcoming period and do not expect the company to be profitable this year. Moreover, the company's gross profit margins are considered weak, which could be a point of concern for investors.
Still, on a more positive note, Day One Biopharma has experienced a strong return over the last three months, with a significant 22.71% price total return, and an impressive 60.0% return over the last six months. The company also holds more cash than debt on its balance sheet, which is a positive sign of financial stability.
For those considering an investment in Day One Biopharma, there are additional InvestingPro Tips available that can help make an informed decision. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and gain access to a total of 11 InvestingPro Tips for Day One Biopharma at https://www.investing.com/pro/DAWN.
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