Crinetics stock target cut to $91 by JMP, maintains high rating

On Friday, JMP Securities analyst Jonathan Wolleben adjusted the price target for Crinetics Pharmaceuticals (NASDAQ:CRNX) to $91.00 from the previous $92.00, while keeping a Market Outperform rating on the stock. The target represents significant upside potential from the current price of $33.21, despite the stock’s recent 11% decline over the past week. Wolleben expressed continued confidence in the company, citing strong management and a pipeline of candidates expected to provide value across near, medium, and long-term horizons. According to InvestingPro data, nine analysts have recently revised their earnings expectations upward for the upcoming period, with price targets ranging from $55 to $97.

Crinetics Pharmaceuticals is anticipated to receive approval for paltusotine in treating acromegaly, with a broad label likely by the September 25 Prescription Drug User Fee Act (PDUFA) date. This optimism is based on what Wolleben described as "the strength of the data from the Phase 3 PATHFNDR studies." The company’s development progress comes at a crucial time, as InvestingPro analysis indicates the stock is currently trading near its 52-week low, potentially presenting an opportunity for investors interested in biotechnology companies with promising pipelines.

In addition to paltusotine, JMP Securities highlighted the potential of other Phase 3 trials set to commence in 2025, including paltusotine for carcinoid syndrome and atumelnant for adult and pediatric congenital adrenal hyperplasia (CAH). These trials are considered less risky due to positive outcomes from earlier Phase 2 studies. The firm also noted CRNX’s approach to designing initial human trials, which includes "challenge" models to establish proof of mechanism sooner than traditional drug development methods.

Wolleben also pointed out Crinetics Pharmaceuticals’ strong financial position, ending 2024 with $1.4 billion in cash reserves. Management believes this will provide the company with sufficient funding into 2029, covering several significant data readouts from its pipeline. InvestingPro data confirms the company’s solid financial foundation, with a current ratio of 16.38 and minimal debt-to-equity ratio of 0.06. The company’s Financial Health Score stands at "FAIR," with particularly strong marks in growth potential and cash flow management. For detailed analysis of these metrics and more, investors can access the comprehensive Pro Research Report available on InvestingPro.

Lastly, the JMP analyst mentioned Crinetics’ ongoing work to finalize trial designs in CAH, with plans to explore a novel endpoint. This new endpoint aims to better demonstrate atumelnant’s dual ability to normalize A4 levels and reduce glucocorticoid requirements, a result not shown by Neurocrine (NASDAQ:NBIX) Biosciences’ Crenessity. With a market capitalization of $3.08 billion and significant investment in R&D, the company’s innovative approach to drug development continues despite current negative earnings, which analysts expect to improve in the coming year.

In other recent news, Kinetics Pharmaceuticals reported a significant decline in revenue for 2024, with earnings dropping to $1 million from $4 million in the previous year. The company faced a net loss of $298.4 million, attributed to increased research and development expenses, which rose to $240.2 million. Despite these financial setbacks, Kinetics maintains a robust cash position of approximately $1.4 billion, expected to support operations until 2029. The FDA has accepted the New Drug Application for paltucitine, a treatment for acromegaly, with a potential launch anticipated in the fourth quarter of 2025. Expansion efforts are also underway in the U.S. and Europe to support this launch. Analyst firms have shown interest in Kinetics’ pipeline, particularly in its strategic focus on endocrine diseases. The company is preparing for Phase III trials of etumelnet for congenital adrenal hyperplasia, aiming to solidify its position in the market. These developments highlight Kinetics’ ongoing efforts to innovate and expand, despite current financial challenges.

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