On Tuesday, ProKidney Corp. (NASDAQ:PROK) received continued support from BTIG with a reiterated Buy rating and a $5.00 price target. The biotechnology company announced its decision to focus solely on the PROACT 1 Phase 3 trial of its renal cell carcinoma treatment, rilparencel, while halting the PROACT 2 study. This strategic move is influenced by the potential for an accelerated approval process in the United States, rendering the international PROACT 2 trial unnecessary.
Management's decision is backed by expert consultations and a thorough review of FDA communications. The anticipated cost savings from discontinuing the PROACT 2 study are significant, estimated to reduce operating expenses by $150-175 million. This financial adjustment is expected to extend the company's cash runway into the first quarter of 2027.
ProKidney anticipates topline data from the PROACT 1 trial by the third quarter of 2027. The company's confidence in the trial's progress is further bolstered by the upcoming full 12-month data from the RMCL-007 trial, expected in the first half of 2025.
The RMCL-007 trial involves a bilateral injection procedure similar to the Phase 3 study design, which may offer insights applicable to the ongoing PROACT 1 trial.
In other recent news, ProKidney Corp. has made significant strides in its clinical trials and corporate operations. The biotech firm has refocused its Phase 3 clinical trial program, discontinuing the PROACT 2 trial outside the U.S. and concentrating on the PROACT 1 trial.
This strategic shift aims to expedite U.S. approval and commercial launch of rilparencel, its chronic kidney disease treatment candidate, and is expected to save the company an estimated $150 to $175 million.
The company has also resumed manufacturing and its Phase 3 clinical studies after receiving a QP Declaration of Equivalence. Furthermore, ProKidney's Phase 2 REGN-007 open-label study showed promising results, indicating kidney function stabilization over 18 months.
In response to these developments, analyst firms BTIG and BofA Securities have maintained their respective Buy and Neutral ratings on ProKidney stock. Additionally, the company launched a $125 million share offering to fund various corporate activities.
InvestingPro Insights
In light of BTIG's continued support for ProKidney Corp., recent data from InvestingPro provides additional context for investors. With a market capitalization of approximately $695.22 million, the company holds a negative P/E ratio of -3.59, indicating that it is not currently profitable. Additionally, the company's P/E ratio has further declined over the last twelve months as of Q2 2024, reaching -7.82. Despite these challenges, ProKidney has experienced a significant return over the last week, with a price total return of 8.6%, and an even more robust return over the last month at 17.07%. However, the one-year price total return reflects a steep decline of -72.22%, underscoring the volatility and risk involved.
InvestingPro Tips suggest that while ProKidney holds more cash than debt, providing a degree of financial stability, the company is quickly burning through cash. This aligns with the management's recent decision to halt the PROACT 2 study to conserve resources. Furthermore, analysts do not anticipate the company will be profitable this year, which is consistent with the negative P/E ratio observed. For investors seeking a deeper analysis, there are additional InvestingPro Tips available that could provide further insights into ProKidney's financial health and market position.
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