On Monday, Relay Therapeutics (NASDAQ:RLAY) received a reiterated Buy rating from TD Cowen, following the announcement of encouraging interim data for its breast cancer treatment, RLY-2608. The data highlighted the treatment's impressive efficacy and safety profile in comparison to existing therapies.
The company reported that RLY-2608, combined with fulvestrant, showed a median progression-free survival (mPFS) of 9.2 months in treating HR+/HER2- locally advanced or metastatic breast cancer.
This performance surpasses the 5.5 months mPFS achieved with AstraZeneca (NASDAQ:AZN)'s Truqap combined with fulvestrant and the 5.6-8.0 months mPFS with Novartis (LON:0QLR) (SIX:NOVN)' Piqray in similar combinations.
The objective response rate (ORR) for RLY-2608 was 33%, potentially reaching 37% with additional unconfirmed partial responses, compared to 29% with Truqap and 19-24% with Piqray.
In a subset of patients with specific kinase mutations, the mPFS extended to 10.3 months, and the ORR increased to 53%. Notably, the treatment demonstrated a superior safety profile, with only one case of Grade 3 or higher hyperglycemia and no discontinuations due to hyperglycemia.
This is a significant finding given that around one-third of the patients enrolled had an elevated risk for hyperglycemia. Other side effects typically associated with PI3K inhibitors, such as rash and diarrhea, were also observed less frequently with RLY-2608.
The promising data has been submitted for presentation at the San Antonio Breast Cancer Symposium (SABCS) scheduled for December 10-13, 2024. Relay Therapeutics plans to advance RLY-2608 into a pivotal Phase 3 trial, which will likely compare its efficacy against Truqap combined with fulvestrant. The trial is expected to commence in 2024, subject to regulatory discussions with the FDA.
Relay is also exploring RLY-2608 in various combinations and as a monotherapy. The company is evaluating its use with ribociclib, with safety data expected in the fourth quarter of 2024 and dose expansion in the first half of 2025.
Additionally, a study combining RLY-2608 with Pfizer (NYSE:PFE)'s atirmociclib is projected to start by the end of 2024, and the monotherapy is being tested in solid tumors with dose expansion anticipated by the end of 2024. Plans are also in place to begin trials for vascular malformations in the first quarter of 2025.
In other recent news, Relay Therapeutics has seen significant developments in its drug development efforts and financial forecasts. The company reported substantial progress in its ReDiscover study, evaluating RLY-2608 as a potential treatment for metastatic breast cancer, revealing a 33% objective response rate across all patients and a 53% rate in those with kinase mutations.
Relay Therapeutics also announced the termination of its collaboration with Roche (LON:0QQ6), resulting in the cessation of further financial benefits or milestone payments.
Several analysts have adjusted their price targets for Relay Therapeutics following these developments. Barclays (LON:BARC) maintained an Overweight rating and raised the stock's price target to $17.00, reflecting increased confidence in the success of RLY-2608.
BofA Securities revised its price target to $20.00, maintaining a Buy rating, while H.C. Wainwright reduced its price target to $18.00, also maintaining a Buy rating. Oppenheimer lowered its price target to $25, but maintained an Outperform rating.
In terms of financials, Relay Therapeutics reported a cash position of approximately $688 million as of the second quarter of 2024, expected to fund operations into 2026. The company also plans to initiate a monotherapy solid tumor dose expansion cohort by the end of 2024, and a vascular malformations study in 2025.
InvestingPro Insights
As Relay Therapeutics (NASDAQ:RLAY) garners attention with its promising interim data for RLY-2608, investors may find the financial health and market performance of the company equally significant. According to InvestingPro data, Relay Therapeutics holds a market capitalization of $1.27 billion, reflecting the market's current valuation of the company. Despite a notable revenue growth rate of 3637.58% in the last twelve months as of Q2 2024, the company's gross profit margin stands at a negative 836.59%, indicating challenges in profitability. These financial metrics are crucial for stakeholders to consider, especially as the company is set to initiate further clinical trials.
InvestingPro Tips highlight that Relay Therapeutics currently holds more cash than debt, which is a positive sign for the company's liquidity and financial resilience. However, the company is also experiencing a rapid cash burn, which investors should monitor closely given the costly nature of clinical trials. Furthermore, the stock has experienced considerable volatility recently, with an 8.1% drop in price total return in the last week alone, underscoring the stock's sensitivity to market dynamics and news flow.
For those seeking a deeper dive into Relay Therapeutics' financials and market performance, InvestingPro offers additional tips on the company's outlook, including analysts' downward revisions of earnings and expectations for sales decline in the current year. To explore these insights, visit https://www.investing.com/pro/RLAY for a comprehensive analysis of Relay Therapeutics, including a total of 11 InvestingPro Tips that may further inform investment decisions.
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