Mitchell Kapoor’s Hold Rating on Reneo Pharmaceuticals Amid OnKure Merger and Oncology Pipeline Potential

H.C. Wainwright analyst Mitchell Kapoor has reiterated their neutral stance on RPHM stock, giving a Hold rating on May 7.

Mitchell Kapoor has given his Hold rating due to a combination of factors concerning Reneo Pharmaceuticals’ forthcoming merger with OnKure and the potential of the combined company’s oncology pipeline. The all-stock merger transaction, anticipated to close in 2024, will pivot Reneo towards oncology, with the new entity to trade under the ticker OKUR. Reneo is expected to have substantial cash reserves post-merger, and leadership will be primarily from OnKure, which has shown a strong track record in the field. The distribution of ownership post-merger, with pre-merger OnKure stockholders holding a majority, signals a significant shift in company direction.
Kapoor’s analysis also highlights the promising preclinical results of OnKure’s lead candidate, OKI-219, which is currently in Phase 1 trials for solid tumors. The drug’s high selectivity and lack of adverse effects on insulin levels at effective doses suggest competitive potential in the precision oncology market. The OnKure leadership team’s successful history, including the development of approved agents and previous high-value acquisitions, lends credibility to the future prospects of the combined company. Nonetheless, Kapoor maintains a Neutral stance, likely reflecting the inherent uncertainties pending the merger’s completion and the early stage of clinical trials.

According to TipRanks, Kapoor is an analyst with an average return of -7.9% and a 43.41% success rate. Kapoor covers the Healthcare sector, focusing on stocks such as Legend Biotech, Halozyme, and Neurogene.

In another report released on May 7, Leerink Partners also reiterated a Hold rating on the stock with a $1.00 price target.

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Reneo Pharmaceuticals (RPHM) Company Description:

Reneo Pharmaceuticals Inc is a clinical stage pharmaceutical company. It is focused on the development of therapies for patients with rare genetic mitochondrial diseases, which are often associated with the inability of mitochondria to produce adenosine triphosphate (ATP). The company is developing REN001 to modulate genes critical to metabolism and generation of ATP, which is the primary source of energy for cellular processes.