On Monday, Stifel increased the price target for Revolution (NASDAQ: RVMD) to $57.00, up from the previous $43.00, while reaffirming a Buy rating on the company's shares. This adjustment comes after the firm reviewed the monotherapy results of Revolution's drug candidate RMC-6236 in pancreatic ductal adenocarcinoma (PDAC).
The company's recent results have bolstered confidence in the drug's potential success in second-line (2L) studies. The analyst highlighted the combinability of the drug, particularly with pembrolizumab, as a potential upcoming catalyst for Revolution's stock. The progression-free survival (PFS) and overall survival (OS) data are still in the early stages, with a notable amount of censoring in the initial three months. However, the Kaplan-Meier (KM) survival curves are perceived to be more favorable than the standard of care (SoC) for 2L chemotherapy, which has a median PFS of approximately 3 to 3.5 months.
The emerging safety profile of RMC-6236 has also been a positive sign, with low-grade elevations in liver enzymes (ALT/AST) observed in only 5-6% of patients, suggesting that the combination of pembrolizumab and RMC-6236 is likely to be well tolerated.
The revised price target reflects a higher probability of success (PoS) for the treatment of PDAC with specific mutations (G12D and G12V), which has been increased to 75%. Additionally, the expected average duration of therapy has been adjusted to 8 months, further contributing to the more optimistic valuation of the company's shares.
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