On Friday, Scotiabank increased its price target for shares of Aura Biosciences (NASDAQ:AURA) to $23.00, up from the previous target of $20.00, while keeping a Sector Outperform rating on the stock.
The upgrade comes after Aura Biosciences revealed promising results from its Phase 1 trial for bel-sar, a treatment candidate for non-muscle invasive bladder cancer (NMIBC). The data presented clear indications of the drug's effectiveness, which has stirred positive reactions from key opinion leaders in the medical community.
During a panel discussion organized by Aura Biosciences, these leaders expressed confidence that bel-sar has the potential to become a highly attractive alternative to the current surgical standards-of-care.
Scotiabank's analyst noted that although bel-sar still has a lengthy development journey ahead, the recent trial results have significantly reduced the program's risk profile. This development has enhanced the value of Aura's pipeline, particularly when considering the prospects of bel-sar beyond its use for choroidal melanoma.
The financial position of Aura Biosciences also appears robust, with the company's third-quarter cash estimate standing at $165 million, which is projected to sustain operations until the second half of 2026. In light of the recent findings, Scotiabank has revised the probability of success for bel-sar in treating NMIBC to 30% from the previous estimate of 10%, leading to the new price target of $23.00.
In other recent news, investment firms H.C. Wainwright, BTIG, and TD Cowen have responded positively to these developments, with H.C. Wainwright and BTIG raising their stock targets for Aura Biosciences and TD Cowen reiterating their Buy rating.
Aura Biosciences is currently preparing for a Phase 2 trial to further evaluate bel-sar and is also conducting a pivotal Phase 3 trial, with data expected in 2026. The company has also reported a change in its financial leadership, with the departure of CFO Julie Feder and the appointment of Amy Elazzouzi as interim CFO.
These are recent developments for Aura Biosciences as it continues to focus on the development of precision therapies for solid tumors.
InvestingPro Insights
Aura Biosciences' recent positive trial results and Scotiabank's upgraded price target are reflected in the company's recent market performance. According to InvestingPro data, AURA has seen a significant 45.75% price return over the last six months, with a 13.33% return in just the past week. This aligns with the InvestingPro Tip that the stock has shown a "Strong return over the last three months."
Despite the optimistic outlook from Scotiabank, it's important to note that AURA is not currently profitable, as indicated by an InvestingPro Tip. The company's P/E ratio stands at -6.31 for the last twelve months as of Q2 2024, reflecting its pre-profit stage, which is common for biotech companies in the drug development phase.
Interestingly, while the market seems bullish on AURA's prospects, the InvestingPro Fair Value for the stock is estimated at $7.26, significantly lower than its previous closing price of $10.29. This discrepancy suggests that investors should carefully consider both the potential upside and the current valuation.
For a more comprehensive analysis, InvestingPro offers 9 additional tips for AURA, providing deeper insights into the company's financial health and market position.
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