Citi maintains ORIC stock Buy rating, $13 target ahead of PFE data

On Tuesday, Citi reaffirmed its Buy rating and $13.00 price target for ORIC Pharmaceuticals (NASDAQ:ORIC), whose stock currently trades at $10.15. The company has shown strong momentum with a 25.77% year-to-date return, despite recent market volatility. The firm anticipates a significant increase in ORIC’s stock value on February 13, coinciding with the expected online publication of Pfizer ’s (NYSE:PFE) ASCO GU late breaker abstract at 10 AM ET. This abstract is set to reveal pivotal randomized Progression-Free Survival (PFS) data that compares the combination of mevrometostat and XTANDI to XTANDI alone in the treatment of metastatic castration-resistant prostate cancer (mCRPC).

ORIC Pharmaceuticals is in the process of developing ORIC-944, a molecule believed to be distinct yet related, targeting the same PRC2 complex as mevrometostat but focusing on the EED subunit as opposed to the EZH2 subunit targeted by mevrometostat. According to InvestingPro data, the company maintains a strong financial position with more cash than debt on its balance sheet, reflected in an impressive current ratio of 13.15. Pfizer has demonstrated a strong belief in mevrometostat’s potential, advancing it into two Phase 3 trials for post-Zytiga mCRPC and ARPI-naïve mCRPC, both in combination with XTANDI. Additionally, Pfizer plans to initiate a third Phase 3 trial in 1L mCSPC during the first half of 2025.

The positive expectations for ORIC’s stock are partly based on the anticipated industry response to the PFS data, which may provide increased visibility and validation for ORIC-944’s mechanism of action (MoA). With a beta of 1.2, ORIC shows moderate market sensitivity. Want deeper insights? InvestingPro subscribers have access to over 30 additional financial metrics and analysis tools. Analysts at Citi draw parallels to the market’s reaction to OLMA’s stock surge during ASCO 2024, following Pfizer’s disclosure of their initial KAT6 data.

To provide investors with guidance, Citi has issued a 30-day Upside Catalyst Watch for ORIC Pharmaceuticals. This watch is indicative of the firm’s confidence in the potential market reaction to the upcoming data release and the implications it may have for ORIC’s stock performance. The broader analyst community shares this optimism, with a highly bullish consensus recommendation of 1.17 and price targets ranging up to $25 per share.

In other recent news, ORIC Pharmaceuticals has made significant progress in advancing its drug trials. The company recently released updates on its ongoing clinical trials, including promising early safety and efficacy data for its drug candidate, ORIC-944, for treating metastatic castration-resistant prostate cancer. In addition, ORIC has initiated a new partnership with Johnson & Johnson to evaluate another drug candidate, ORIC-114, for first-line treatment of non-small cell lung cancer patients with specific mutations.

The company has completed the first two dose escalation cohorts of ORIC-944 and expects to report seven data readouts across the ORIC-114 and ORIC-944 clinical programs over the next 18 months. ORIC also secured a $125 million private investment to extend its operational runway into late 2026. Analysts from Jones Trading, Stifel, H.C. Wainwright, and Citi have maintained Buy ratings for the company, while Oppenheimer maintains an Outperform rating.

These recent developments underscore ORIC Pharmaceuticals’ commitment to advancing its drug development programs and positioning the company for progress in the coming years.

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