On Friday, RBC Capital adjusted its outlook for biopharmaceutical company Xencor, Inc. (NASDAQ: NASDAQ:XNCR) shares, reducing the price target to $31 from the previous $32. The firm has retained an Outperform rating on the stock.
This revision follows Xencor's announcement that it has regained rights to the drug candidate plamotamab after Janssen, a partner in its development, decided to terminate its involvement. However, Janssen will continue the collaboration with Xencor on other projects, specifically the CD28 bispecific antibodies JNJ-9401 and JNJ-1493.
The announcement from Xencor came as the company disclosed that Janssen would no longer pursue the development of plamotamab, an experimental treatment that targets CD20 x CD3.
Despite this change, RBC Capital views the development as having a limited impact on Xencor's prospects. The firm believes that plamotamab's contribution to Xencor's value was minimal, as the internal program for the drug had already been deprioritized by the company.
In a follow-up with Xencor's management, insights were gained that suggest the company may be interested in leveraging plamotamab for potential applications in treating autoimmune diseases.
This strategic option emerged as part of the rationale behind the return of the asset to Xencor's portfolio. RBC Capital's decision to adjust the price target reflects the removal of plamotamab from their financial model, resulting in a slight decrease.
The Outperform rating indicates that RBC Capital anticipates Xencor's stock to perform better than the average total return of the stocks covered by the analyst in the sector over the next 12 months. The Speculative Risk qualifier attached to the rating suggests that the stock may have considerable price volatility or risk associated with its business.
Xencor, Inc. specializes in the development of engineered monoclonal antibodies for the treatment of cancer and autoimmune diseases. The company's shares are traded on the NASDAQ stock exchange under the ticker symbol XNCR.
In other recent news, Xencor Inc . has seen a series of significant developments. The biopharmaceutical firm has regained full rights to its cancer treatment drug, plamotamab, after Janssen Biotech, Inc. decided to end its involvement in the product. The drug, which is now ready for Phase 2 trials, had been co-developed by the two companies for hematologic cancer treatment.
In the realm of financial analysis, BTIG has revised its price target for Xencor shares to $38, down from $56, while maintaining a Buy rating. This adjustment comes after an industry discussion on the development landscape for metastatic castration-resistant prostate cancer (mCRPC), stressing the need for more data to validate the potential of CTLA4-targeting treatments.
Moreover, Xencor has announced the appointment of Bart Cornelissen as its new Senior Vice President and Chief Financial Officer. Cornelissen, with his extensive experience in corporate finance and significant role in Seagen Inc.'s growth and its acquisition by Pfizer (NYSE:PFE), is anticipated to bolster Xencor's growth through strategic planning and capitalization. These developments highlight the ongoing evolution and progress within Xencor Inc.
InvestingPro Insights
Amidst the recent developments with Xencor's drug candidate plamotamab and the subsequent adjustment of RBC Capital's price target, current data from InvestingPro provides a broader financial perspective on Xencor, Inc. (NASDAQ: XNCR). With a market capitalization of approximately $1.31 billion, Xencor's financial health is underscored by its ability to hold more cash than debt, a reassuring sign for investors. Additionally, the company's liquid assets surpass its short-term obligations, highlighting a stable liquidity position.
Analyzing the company's profitability, Xencor has a negative P/E ratio of -9.77, reflecting the challenges in earnings it faces. Despite a robust revenue growth of 65.41% in the last twelve months as of Q1 2024, the company is grappling with weak gross profit margins of -51.02%, which could be a concern for potential investors. Notably, three analysts have revised their earnings upwards for the upcoming period, suggesting a potential shift in the company's financial trajectory.
For those considering an investment in Xencor, leveraging the insights available on InvestingPro could be invaluable. With additional tips available, such as the anticipated sales decline in the current year and the expectation that the company will not be profitable this year, investors can gain a comprehensive understanding of Xencor's financial standing. To access these insights and more, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro. Remember, there are 6 more InvestingPro Tips available that could help inform your investment decisions.
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