On Tuesday, Morgan Stanley initiated coverage on CG Oncology (NASDAQ:CGON) with an Overweight rating and a price target of $55.00. The firm highlighted CG Oncology's focus on developing therapies for bladder cancer, emphasizing the potential of its lead candidate, cretostimogene grenadenorepvec. Currently in Phase 3 as a monotherapy and Phase 2 in combination with pembrolizumab, this treatment targets high-risk non-muscle invasive bladder cancer patients who have not responded to the standard-of-care treatment.
The scarcity of the standard BCG therapy for bladder cancer has left many patients without adequate treatment. Morgan Stanley suggests that cretostimogene may become the new standard-of-care, potentially replacing BCG. According to the firm, the competitive nature of the bladder cancer market is challenged by the strong data supporting cretostimogene, which indicates effectiveness comparable to or better than other approved therapies and developmental candidates.
Cretostimogene's monotherapy data show a significant proportion of patients reaching a state of undetectable cancer, with 76% efficacy compared to a range of 41%-77% in other treatments. Moreover, the combination therapy with pembrolizumab has shown even higher efficacy, with 85% of patients having no detectable cancer. These results have been achieved without high-grade safety concerns or treatment-related discontinuations.
The initial data for both monotherapy and combination therapy suggest a potential market for approximately 15,500 patients. However, CG Oncology aims to expand its reach within the bladder cancer treatment market to an estimated 55,400 patients. The firm anticipates multiple data readouts and milestones throughout 2024.
Significant updates are expected in the first half of 2024, including additional durability data from the CORE-001 Phase 2 combination study. By the end of 2024, topline results from the BOND-003 Phase 3 monotherapy study are anticipated. Furthermore, the enrollment for the intermediate-risk Phase 3 PIVOT006 monotherapy study is projected to be completed in the second half of 2026.
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