Ladenburg Thalmann has raised its rating on shares of Compass Therapeutics (NASDAQ: CMPX) from Neutral to Buy, setting a price target of $5.00.
The upgrade comes after the firm revisited the company's prospects, particularly its CTX-009 treatment for biliary tract cancers (BTC) and colorectal cancer (CRC).
Last week, the firm's analysts had a meeting with Compass Therapeutics' management to discuss the progress of the ongoing CTX-009 programs.
A significant phase 2/3 trial for second-line BTC treatment is expected to release data in the first quarter of 2025, with the objective response rate (ORR) as the primary endpoint. The trial compares the efficacy of CTX-009 in combination with paclitaxel to paclitaxel alone.
Previously, in a South Korean trial, CTX-009 demonstrated a 38% ORR among second and third-line BTC patients. This is notably higher than the less than 5% ORR typically achieved by standard chemotherapy in advanced BTC cases.
Despite a decrease in ORR observed in U.S. CRC monotherapy trials, the analysts expect CTX-009 to show a slight advantage over paclitaxel.
The firm anticipates that while the improvement in ORR may not be substantial enough for FDA approval on its own, CTX-009 could potentially show more durable responses, which may enhance progression-free survival (PFS) and overall survival (OS) as the data matures in 2025. The FDA's approval decision, expected between 2026 and 2027, is likely to consider duration of response (DoR), PFS, and OS, with a 40% probability of success (PoS) assigned by the analysts.
In other recent news, Compass added Ellen V. Chiniara, J.D., and Mary Ann Gray, Ph.D., to its board of directors. The stockholders also ratified the appointment of CohnReznick, LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2024.
In addition to board appointments, the company recently welcomed a new President and Chief Executive Officer, Thomas Schuetz, M.D., Ph.D., as it continues to progress its clinical programs and reach key clinical milestones. Analyst firm Jefferies has adjusted the stock price target for Compass Therapeutics, maintaining a Buy rating despite a decrease in target price.
In terms of product development, Compass Therapeutics presented encouraging preclinical data at the American Association for Cancer Research Annual Meeting, highlighting the potential effectiveness of its proprietary antibodies, CTX-009 and CTX-471, against tumors resistant to current immune-oncology therapies.
InvestingPro Insights
As Compass Therapeutics (NASDAQ:CMPX) garners attention with the recent upgrade from Ladenburg Thalmann, it's worth noting some financial health and market performance metrics from InvestingPro. Compass Therapeutics holds more cash than debt on its balance sheet, which could provide a cushion for the company as it continues to invest in the development of CTX-009. However, the company is quickly burning through cash, a point of concern as it moves towards significant clinical trial milestones. This financial trajectory is reflected in the sentiment of analysts, with 5 having revised their earnings downwards for the upcoming period, and a consensus that the company will not be profitable this year.
Despite the challenges, Compass Therapeutics has shown a strong return over the last month and the last three months, indicating positive market sentiment in the short term. Moreover, the company's liquid assets exceed its short-term obligations, suggesting it is well-positioned to manage its liabilities in the near future. For investors seeking a deeper dive into Compass Therapeutics' financials and market potential, additional InvestingPro Tips can be found on the platform, providing a comprehensive analysis of the company's prospects.
For those closely following Compass Therapeutics' journey, these insights may provide a balanced view of the company's financial health and market performance as it progresses through the development of its treatments. With additional tips available on InvestingPro, investors can stay updated on the latest metrics and expert analyses.
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