On Thursday, H.C. Wainwright adjusted its financial outlook for shares of Genelux Corp. (NASDAQ:GNLX), lowering the price target to $30 from $32, while maintaining a Buy rating on the stock. The revision followed Genelux's earnings report for the third quarter of 2024 and a corporate update provided after the market closed on Wednesday.
Genelux's ongoing collaboration with Newsoara Biopharma in China was highlighted, noting that patient enrollment and treatment are progressing in the recurrent Small Cell Lung Cancer (SCLC) Phase 1b/2 trial. The trial's interim data remains on schedule for release by the end of 2024.
Currently, the trial is in the dose escalation phase, aiming to enroll approximately 18 patients who will receive Olvi-Vec intravenously over consecutive days, combined with platinum and etoposide, following a previous failure on a platinum and etoposide regimen.
The study, which is open-label and serves as a Proof of Concept (POC) trial for systemic administration of Olvi-Vec, seeks to establish the optimal dosing regimen. The starting doses are lower than those used in studies for ovarian cancer, with plans to increase dosing gradually.
The analyst pointed out that previous studies with ipilimumab plus nivolumab and pembrolizumab as second-line treatments for SCLC showed overall response rates of approximately 10-20% and relatively low progression-free survival of 2 months or less.
The analyst expressed that positive initial data from the SCLC study could mitigate risks associated with intravenous administration of Olvi-Vec and increase confidence in its potential for treating recurrent non-small cell lung cancer and other solid tumors. The Buy rating was reiterated, with the price target adjusted to reflect the latest developments and expectations.
In other recent news, Genelux has been the subject of multiple analyst notes and significant clinical developments. Guggenheim initiated coverage on Genelux with a Buy rating and a price target of $8, highlighting the company's ongoing pivotal Phase III trial of Olvi-vec in treating platinum-resistant/refractory ovarian cancer.
In contrast, Roth/MKM and Benchmark offered their perspectives, the former initiating coverage with a Buy rating and a price target of $10, while the latter revised its price target to $25 from $30, maintaining a Speculative Buy rating.
Genelux has also made strides in its clinical trials, initiating a Phase 2 trial for Olvi-Vec targeted at non-small cell lung cancer (NSCLC) patients, with interim data expected by mid-2025. Furthermore, the company is conducting a Phase 3 trial for Olvi-Vec in combination with chemotherapy for ovarian cancer and a Phase 1b/2 trial in China for recurrent Small Cell Lung Cancer.
In terms of financial developments, Genelux recently raised $27.5 million through an equity offering of 6.875 million shares. However, the company also announced the resignation of Caroline Jewett, Vice President and Head of Quality, effective October 18, 2024. These are among the recent developments as Genelux continues to advance its cancer treatment pipeline.
InvestingPro Insights
Recent InvestingPro data provides additional context to Genelux Corp.'s financial situation and market performance. Despite the analyst's optimistic outlook, the company faces significant challenges. InvestingPro Tips reveal that Genelux is quickly burning through cash and is not expected to be profitable this year. This aligns with the company's reported operating income of -$27.32 million over the last twelve months.
However, it's not all negative for Genelux. The company holds more cash than debt on its balance sheet, and its liquid assets exceed short-term obligations. This financial cushion could be crucial as the company continues its clinical trials and awaits potential breakthroughs.
Interestingly, while the stock price has fallen significantly over the last year, with a -78.19% one-year price total return, Genelux has shown a strong return of 38.03% over the last three months. This recent uptick might reflect growing investor optimism about the company's ongoing clinical trials and potential future developments.
For investors seeking a deeper understanding of Genelux's prospects, InvestingPro offers 10 additional tips that could provide valuable insights into the company's financial health and market position.
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