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Investing.com - Leerink Partners has lowered its price target on iTeos Therapeutics (NASDAQ:ITOS) to $10.00 from $12.00 while maintaining a Market Perform rating on the stock. The stock currently trades at $10.13, and according to InvestingPro analysis, the company appears undervalued based on its Fair Value assessment.
The firm believes the acquisition of iTeos by privately-held Concentra Biosciences, LLC is likely to close despite representing a 2% discount to the company’s trading price prior to the announcement and a 19% discount to Leerink’s estimates of cash post-wind down.
According to Leerink, the top two shareholders of iTeos—EcoR1 and Tang Capital—hold approximately 38% of the company, and both would benefit from the $10 per share deal based on their cost basis as of their last filings.
The deal terms value iTeos at approximately 30% of its previously disclosed cash position, with the company reporting $624 million in cash at the end of the first quarter of 2025. Leerink had previously estimated close-out cash of approximately $543 million ($12 per share) following wind-down costs.
Leerink analysts note that the difference between the first quarter cash position and the deal terms ($475 million cash at deal close) likely reflects expenses to wind down Belgium R&D operations, and they believe the contingent value right (CVR) payout from asset sales in the next six months is unlikely due to difficulties in out-licensing immuno-oncology assets.
In other recent news, iTeos Therapeutics has announced plans to cease operations and explore the sale of its assets. This strategic decision follows an extensive review of its development pipeline and financial position, with the aim of maximizing shareholder value. The company is focusing on selling key assets, including EOS-984, EOS-215, and a preclinical obesity program targeting ENT1. Additionally, iTeos plans to leverage its cash reserves to deliver near-term value to its shareholders.
In related developments, Wedbush downgraded iTeos stock from Outperform to Neutral but raised the price target from $10 to $12. Piper Sandler also adjusted its price target for iTeos, reducing it from $16 to $12, while maintaining an Overweight rating. This follows the decision to discontinue the belrestotug program after it failed to meet key clinical endpoints. Furthermore, Tim Van Hauwermeiren resigned from the iTeos Board of Directors, with no disagreements cited with the company or its management.
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