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Investing.com - Guggenheim initiated coverage on Relay Therapeutics (NASDAQ:RLAY) with a Buy rating and a $15.00 price target on Thursday. The stock, which has surged over 11% in the past week, currently trades below InvestingPro’s Fair Value estimate, with analyst targets ranging from $4 to $19.
The research firm designated Relay as a "Best Idea," questioning why the company trades below cash value given its promising pipeline. This assessment aligns with InvestingPro data showing Relay holds more cash than debt and maintains a healthy current ratio of 20.9x. Guggenheim highlighted RLY-2608, Relay’s oral, selective, pan-mutant PI3Ka inhibitor currently in a fully-funded Phase 3 breast cancer trial.
The firm noted that RLY-2608’s Phase 1b progression-free survival doubled expected control performance, with commercial prospects appearing strong as "several worse drugs in the same setting quickly sold >$500mm." Relay also leads competitors in this mutant-selective class by 18-24 months.
Beyond oncology applications, Guggenheim pointed to potential near-term catalysts from RLY-2608’s development for vascular malformations (VM), an orphan disease where PI3Ka mutations cause benign but debilitating overgrowth, primarily in children. This market is currently served by alpelisib, which generates $300 million in growing sales despite physicians widely underdosing it to avoid toxicity. For deeper insights into Relay’s financial health and growth potential, investors can access the comprehensive Pro Research Report available on InvestingPro, which includes 13 additional ProTips and detailed valuation metrics.
Relay initiated a VM Phase 1 trial in Q1 2025, with Guggenheim anticipating an expedited regulatory pathway and suggesting the company’s oncology-to-orphan thesis shift could yield "substantial successes" similar to other biotech companies that made similar pivots.
In other recent news, Wells Fargo has reiterated its Equal Weight rating on Relay Therapeutics. The firm has maintained a price target of $4.00 for the company’s stock. This decision comes amid ongoing clinical developments within Relay Therapeutics. Analysts at Wells Fargo noted that the company’s shares have declined 15% year-to-date. This performance is in contrast to the XBI biotech index, which has seen a 5% decline over the same period. These developments highlight the challenges Relay Therapeutics is currently facing in the market. Investors may want to monitor the company’s clinical progress closely.
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