On Monday, Purple Biotech Ltd. (NASDAQ:PPBT) experienced a significant adjustment in its outlook. Jones Trading set a new price target for the company's shares at $3.00, a substantial decrease from the previous target of $8.00. Despite this change, the firm maintained a Buy rating on the stock.
The adjustment followed the announcement of interim Phase 2 data for CM24 in second-line pancreatic ductal adenocarcinoma (PDAC) at the American Society of Clinical Oncology (ASCO) meeting.
The data revealed improvements across various endpoints, including overall survival (OS), progression-free survival (PFS), and objective response rate (ORR), when comparing CM24 to a placebo.
Jones Trading noted that while the results indicated an improvement over placebo, the study was not designed with the statistical power to confirm a definitive difference. Therefore, a larger sample size would be necessary to verify the benefits observed.
Additionally, the underperformance of the placebo arm relative to historical expectations was highlighted, which might have been influenced by variations in the ethnic backgrounds of the study participants.
The firm expressed the opinion that the data demonstrated activity in PDAC treatment but did not fully mitigate the risks associated with future data readouts.
Consequently, the probability of success (POS) for CM24 was adjusted to 20% from the previous estimate of 35%. This reassessment led to the lowering of the price target to $3.00.
In summary, while Jones Trading continues to recommend buying Purple Biotech shares, the firm has recalibrated its expectations and valuation of the company based on the latest clinical data, resulting in a lowered price target.
InvestingPro Insights
Following the recent evaluation by Jones Trading, Purple Biotech Ltd. (NASDAQ:PPBT) has shown notable market activity. According to InvestingPro data, the company holds a market capitalization of $21.8 million, with a significantly low price-to-earnings (P/E) ratio of -1.41 as of the last twelve months leading up to Q1 2024. This negative P/E ratio reflects the company's lack of profitability during this period, which aligns with analysts' expectations that Purple Biotech will not be profitable this year. Furthermore, the stock has experienced a remarkable one-month price total return of 52.36%, indicating a strong short-term performance despite a more challenging long-term trend, with a one-year price total return of -51.65%.
InvestingPro Tips suggest that while Purple Biotech holds more cash than debt, it is rapidly depleting its cash reserves and suffers from weak gross profit margins. Additionally, the valuation implies a poor free cash flow yield. Investors interested in a deeper dive into Purple Biotech's financial health and future prospects can find additional tips on InvestingPro, with a total of 9 more tips available. For those looking to access these comprehensive insights, remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at https://www.investing.com/pro/PPBT.
It's crucial for investors to consider these metrics and tips in the context of the company's recent clinical data and the subsequent adjustment of the stock's price target. The data points provided by InvestingPro offer a more granular view of the financial landscape for Purple Biotech, potentially aiding investors in making informed decisions.
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