Promising Preclinical Data and Positive Phase 2 Results Bolster Buy Rating for Elevation Oncology

Swayampakula Ramakanth, an analyst from H.C. Wainwright, maintained the Buy rating on Elevation Oncology (ELEV – Research Report). The associated price target remains the same with $6.00.

Swayampakula Ramakanth’s rating is based on the promising preclinical data for Elevation Oncology’s new HER3-ADC1 candidate and the positive results from the Phase 2 study of seribantumab. The HER3-ADC1 candidate has shown efficacy in preclinical models, particularly against tumors that express the HER3 protein. It demonstrated HER3-dependent cytotoxicity that was superior to an experimental HER3-targeting ADC currently being evaluated, thus highlighting its potential as an effective treatment for HER3-expressing tumors. Additionally, the company’s commitment to advancing this candidate into clinical evaluation by the end of 2024 further supports the optimistic outlook.

Furthermore, Ramakanth’s recommendation is supported by a valuation model that incorporates a risk-adjusted net present value (rNPV) analysis of projected future revenues from Elevation Oncology’s product candidates. A conservative approach was taken, assuming a 20% probability of launch and a 12% discount rate, with no terminal growth rate. This analysis yielded an rNPV of $747.1 million, and when combined with net cash and cash equivalents, resulted in a price target of $6.00 per share. Despite potential risks related to clinical trials, partnerships, regulatory hurdles, commercialization, and competition, the financial assessment justifies the Buy rating.

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Elevation Oncology (ELEV) Company Description:

Elevation Oncology Inc is an oncology company focused on the development of targeted therapeutics for the treatment of cancer in genomically defined patient populations. Its lead program is focused on neuregulin-1, or NRG1, fusions, which are rare genomic alterations that have the potential to be therapeutically actionable through targeted HER3 inhibition.