Piper Sandler has reiterated its Overweight rating on shares of iTeos Therapeutics (NASDAQ: ITOS), maintaining a price target of $36.00.
The firm's positive outlook is based on recent data presented at the European Society for Medical Oncology (ESMO) meeting held over the weekend.
The data showed that iTeos's drug, belrestotug, in combination with dostarlimab, demonstrated significant efficacy in treating patients with PD-L1 high NSCLC (non-small cell lung cancer).
On Monday, the analyst from Piper Sandler expressed confidence in the stock's potential performance, anticipating a sharp rise in its value following the ESMO update.
The combination of belrestotug and dostarlimab showed a roughly 59% confirmed objective response rate (ORR), with an unconfirmed rate of 66%, compared to 28% for dostarlimab alone. This result met the target range of 55-60% ORR set for belrestotug to validate its effectiveness in this clinical setting.
The study results also included supportive ctDNA analyses, which are used to evaluate genetic mutations in cancer. Despite noting some safety signals, the analyst believes that the adverse event (AE) profile of belrestotug is comparable to that of Roche’s tiragolumab, another drug in the same TIGIT class of cancer immunotherapies.
In other recent news, iTeos Therapeutics released positive interim data from the Phase 2 GALAXIES Lung-201 study. The data, presented at the annual Congress of the European Society for Medical Oncology, demonstrated encouraging results for the combination therapy of belrestotug and dostarlimab.
H.C. Wainwright reaffirmed a Buy rating on iTeos, while Wells Fargo (NYSE:WFC) initiated an Overweight rating. In financial updates, iTeos reported a first-quarter net loss of $1.07 per share for 2024, which was slightly above the projected net loss of $0.98 per share.
The company also announced a $120 million stock sale involving over 1.1 million shares of common stock. Recent corporate developments include the appointment of Dr. David Feltquate as the new Chief Medical Officer and the election of two Class I directors at the Annual Meeting of Stockholders.
Deloitte Bedrijfsrevisoren / Réviseurs d’Entreprises BV/SRL was ratified as the company's independent auditor for the upcoming fiscal year.
InvestingPro Insights
Based on the recent positive clinical data and the subsequent analyst endorsement, investors may find the real-time metrics and InvestingPro Tips for iTeos Therapeutics (NASDAQ:ITOS) particularly relevant. As of the last twelve months leading up to Q2 2024, iTeos Therapeutics held a market capitalization of approximately $609.91 million. Despite a challenging revenue growth rate of -59.3%, the company's gross profit margin remained at 100%, indicating that while revenue contracted, the costs directly associated with producing their drug remained controlled.
InvestingPro Tips for iTeos Therapeutics highlight that the company has more cash than debt on its balance sheet and liquid assets that exceed short-term obligations, suggesting a degree of financial stability. However, analysts have revised their earnings downwards for the upcoming period and do not anticipate the company will be profitable this year. This contrasts with the sharp rise in share price over the last six months, which saw a 54.49% increase, reflecting market optimism that may be spurred by the recent clinical data.
For those considering investment in iTeos Therapeutics, it's worth noting that the company does not pay a dividend, which may be a factor for income-focused investors. The InvestingPro product includes additional tips, with a total of 9 more insights available for investors seeking a deeper analysis of iTeos's financial health and market position.
Investors can further explore these metrics and tips by visiting the InvestingPro platform for iTeos Therapeutics, which includes a fair value estimate of $18.57, suggesting a potential undervaluation compared to the analyst target of $33.50. As the company navigates its path towards commercializing belrestotug, these financial insights could be crucial for stakeholders assessing the stock's potential amidst the biotechnology sector's inherent volatility.
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