H.C. Wainwright has adjusted its outlook on Relay Therapeutics (NASDAQ: RLAY), raising the price target to $19.00 from the previous $18.00 and maintaining a Buy rating.
The revision follows Relay's recent update on its Phase 1 ReDiscover trial, which is evaluating RLY-2608 alone and in various combinations for the treatment of PiK3CA-mutant, HR+/HER2- metastatic breast cancer (mBC).
Relay reported that the combination of RLY-2608 and Faslodex has shown promising results. At the recommended phase 2 dose (RP2D), the therapy achieved a 33.3% objective response rate (ORR) and a median progression-free survival (mPFS) of 9.2 months in a study group of 64 patients. Notably, patients with kinase mutations experienced even better outcomes with an ORR of 53% and an mPFS of 10.3 months.
The safety profile of RLY-2608 was also highlighted, with only 1.6% of patients experiencing Grade 3 or higher hyperglycemia. Moreover, the majority of hyperglycemia cases were Grade 1, which did not require intervention.
Based on these findings, Relay Therapeutics plans to launch a pivotal trial in 2025 that will compare RLY-2608 plus Faslodex against Truqap (capivasertib) plus Faslodex, with mPFS as the primary endpoint.
In light of the trial update, H.C. Wainwright has increased the probability of approval for RLY-2608 in combination with Faslodex from 25% to 60%. However, the firm has also adjusted the expected peak market penetration rate, lowering it to 15% from the previous estimate of 20%. The updated assessment takes into account both the positive trial results and the impact of a recent equity raise by Relay Therapeutics.
In other recent news, Relay Therapeutics has been the subject of several analyst reports following the release of positive interim data for its drug candidate RLY-2608. The data demonstrated a median progression-free survival of 9.2 months, a significant improvement over other therapies.
This has led to multiple firms adjusting their stance on the company. Stifel maintained its Buy rating on Relay Therapeutics with a steady price target of $28.00, while Jefferies upgraded the stock from Hold to Buy. On the other hand, Oppenheimer downgraded their rating from Outperform to Perform due to concerns about the selectivity profile of RLY-2608.
Goldman Sachs (NYSE:GS) reinstated coverage on Relay Therapeutics with a Buy rating and a price target of $20.00, following the positive Phase 2 data for RLY-2608. H.C. Wainwright, despite reducing its price target to $18.00, maintained a Buy rating.
In addition to these developments, Relay Therapeutics has initiated a $200 million underwritten public offering of its common stock, with Goldman Sachs & Co. LLC, TD Cowen, Stifel, and BofA Securities serving as joint book-running managers.
As of the second quarter of 2024, the company reported a cash position of approximately $688 million, expected to fund operations into 2026.
InvestingPro Insights
As Relay Therapeutics (NASDAQ:RLAY) continues to develop its treatments and undergo clinical trials, it's crucial for investors to consider not just the scientific progress but also the company's financial health and market performance. According to InvestingPro, Relay holds more cash than debt on its balance sheet, which is an encouraging sign of financial stability. Additionally, four analysts have revised their earnings upwards for the upcoming period, reflecting a potential positive sentiment around the company's future performance.
Relay's market capitalization stands at $1.23 billion, and despite its impressive revenue growth of over 3637% in the last twelve months as of Q2 2024, the company is still not profitable, with a negative gross profit margin of approximately -837%. The stock has experienced significant volatility with a notable 20% drop over the last week, yet it has still managed to secure a strong return of nearly 18% over the past month. Relay's next earnings date is set for October 31, 2024, which will be a pivotal moment for investors to assess the company's financial trajectory.
For those interested in a deeper analysis, InvestingPro offers additional tips on Relay Therapeutics, providing a comprehensive view of the company's financials and market performance. With these insights, investors can make more informed decisions about their involvement with Relay Therapeutics.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.