On Monday, UBS reaffirmed its confidence in ALX Oncology (NASDAQ:ALXO) stock maintaining a Buy rating and a $25.00 price target for the company's shares.
The endorsement follows the presentation of data for the ASPEN-07 study, which indicated approximately a 20% increase in the Objective Response Rate (ORR) compared to historical data from monotherapy with enfortumab vedotin (EV). Although these findings are in the preliminary stages and most responses were unconfirmed at the time of the cutoff, the results were considered promising.
ALX Oncology's management expressed confidence in the depth and duration of the response to ASPEN-07 at both evaluated dose levels. Notably, the study did not reveal any worrisome synergistic hematological toxicity, with a low overall incidence of Grade 3/4 hematological events. The discussion during the call also touched on the lack of a dose-response relationship, with seemingly higher and deeper responses observed in the low dose cohort.
The two dose cohorts in the ASPEN-07 study, 20mg/kg and 30mg/kg, had sequential enrollment with approximately one month between them. Consequently, patients in the 20mg/kg cohort have had a longer follow-up period.
When questioned about the average treatment duration and rates of dose reductions in the respective cohorts, ALX Oncology indicated that, thus far, no tolerability issues have been observed with either dose level, and the team does not anticipate differences in tolerability in the higher dose combination cohort.
ALX Oncology's latest data presentation has reinforced UBS's positive outlook on the company's prospects. The maintained price target and Buy rating reflect an anticipation of continued progress and potential in ALX Oncology's ongoing studies and treatment developments.
In other recent news, ALX Oncology has seen a flurry of activity around its clinical studies and corporate structure. Piper Sandler reaffirmed its Overweight rating on ALX Oncology following the review of the ASPEN-07 Phase 1a study data for evorpacept in combination with Padcev for the treatment of urothelial carcinoma. Despite differing opinions on the drug's potential, the analysis indicated that the market seems to have accounted for this information in the company's stock.
The ASPEN-07 study data, which showed an objective response rate of 59%, suggests a potential additional revenue stream for ALX Oncology. In addition, the firm's attention is now turning to the forthcoming full data from the ASPEN-06 trial, which could further influence the value of ALX Oncology's shares.
In conjunction with this, Stifel maintained its Hold rating on ALX Oncology, following the presentation of new single-arm efficacy data from an evorpacept non-Hodgkin lymphoma combination. The data supports the view that evorpacept can enhance the tumor cell killing abilities of monoclonal antibodies.
On the corporate front, ALX Oncology announced the appointment of Allison Dillon, Ph.D., as its new Chief Business Officer. Dillon's extensive experience in oncology product development is expected to be instrumental as the company prepares for multiple clinical study outcomes within the next year. These are the recent developments in ALX Oncology.
InvestingPro Insights
Following the optimistic update from UBS on ALX Oncology (NASDAQ:ALXO), a glimpse into the company's financial health and stock performance through InvestingPro data reveals a nuanced picture. With a market capitalization of approximately $469.42 million and a notable Price to Book ratio of 2.86 as of Q1 2023, ALXO's valuation metrics present a mixed sentiment. The company's substantial operating loss of $175.84 million and an EBITDA of -$175 million over the last twelve months, combined with a negative Return on Assets of -67.73%, underscore the challenges ALXO faces in reaching profitability.
InvestingPro Tips highlight that ALXO holds more cash than debt, which is a positive sign for the company's balance sheet. Additionally, the stock is currently in oversold territory according to the Relative Strength Index (RSI), which could interest investors looking for potential entry points. However, analysts are not expecting the company to be profitable this year, and the stock has experienced a significant downturn over the past three months, with a 1 Month Price Total Return of -44.42%.
For those considering an investment in ALXO, it's worth noting that the company does not pay a dividend, and it has been not profitable over the last twelve months. With these financial insights and additional tips available on InvestingPro, potential investors can make a more informed decision. To access more InvestingPro Tips for ALX Oncology, visit https://www.investing.com/pro/ALXO and consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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