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On Thursday, H.C. Wainwright reaffirmed a Buy rating and a $28.00 price target for Olema Pharmaceuticals (NASDAQ:OLMA), following the company’s update on its ongoing clinical trials. Currently trading at $4.96, with a market cap of $339 million, the stock appears undervalued according to InvestingPro Fair Value metrics. Analyst targets range from $18 to $30, with a strong consensus recommendation of 1.38 (where 1 is a Strong Buy). Olema Pharmaceuticals announced on Wednesday, May 28, that it had selected a 90 mg once-daily dose of its drug palazestrant for the second part of the Phase 3 OPERA-01 monotherapy trial and the upcoming Phase 3 OPERA-02 combination trial with ribociclib.
The OPERA-01 trial, which includes 510 patients, is structured in two parts. The first part randomized 120 patients to receive either a 90 mg or 120 mg dose of palazestrant versus the standard of care (SOC) endocrine therapy to determine the appropriate dose for further study. InvestingPro data shows the company maintains a strong liquidity position with a current ratio of 15.22, though it’s currently burning through cash with negative free cash flow of $124.8 million over the last twelve months. The second part of the trial will randomize 390 patients to receive the selected dose of palazestrant versus SOC endocrine therapy in patients with ER+/HER2- metastatic breast cancer.
The decision to proceed with the 90 mg dosage aligns with the FDA’s recommendation, potentially leading to fewer gastrointestinal toxicities while maintaining the drug’s efficacy. The FDA’s Project Optimus, which aims to reform dose optimization in oncology drugs, may have influenced this preference for the lower dose. H.C. Wainwright’s analysis assumes that the drug profile at the 90 mg dose is very similar to that of the 120 mg dose, which was more commonly used in Phase 1/2 trials.
The announcement indicates that at least the first 120 patients have been enrolled in the Phase 3 trial as of the update provided on May 28. Olema Pharmaceuticals is scheduled to present a trial in progress poster of the OPERA-01 trial at the American Society of Clinical Oncology (ASCO) meeting on June 2, during the 9am-12pm CT session focused on metastatic breast cancer, with the abstract number TPS1131.
The reiterated Buy rating and price target of $28 reflect the analyst’s continued confidence in Olema Pharmaceuticals and its lead drug candidate, palazestrant, as it progresses through the clinical trial phases. The stock has experienced significant volatility, with a beta of 2.04 and a 51% decline over the past six months. InvestingPro subscribers have access to 8 additional key insights about OLMA’s financial health and market position, along with real-time updates on its clinical trial progress.
In other recent news, Olema Pharmaceuticals reported its first-quarter financial results for 2025, revealing an operating loss of $34.9 million and earnings per share (EPS) of ($0.36). The company ended the quarter with $392.7 million in cash and equivalents, bolstered by a successful equity raise in late 2024. H.C. Wainwright adjusted its price target for Olema Pharmaceuticals to $28, down from $30, while maintaining a Buy rating. This adjustment is attributed to an increase in the number of shares outstanding. Despite the lowered price target, the firm remains optimistic about Olema’s prospects, particularly due to promising results from its Phase 2 study of palazestrant in combination with ribociclib for ER+/HER2- metastatic breast cancer. The study reported a median progression-free survival (PFS) of 13.8 months for all patients, outperforming competitor studies. The data also indicates a potentially differentiated efficacy profile across various patient subtypes. Olema plans to initiate a Phase 3 trial in 2025, with more mature data expected to be presented at the American Society of Clinical Oncology meeting later this year.
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