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On Thursday, JPMorgan analyst Brian Cheng adjusted the price target for Xencor, Inc. (NASDAQ:XNCR) shares, reducing it to $20.00 from the previous $23.00, while maintaining an Overweight rating on the stock. The adjustment comes as Xencor’s shares, currently trading at $8.21, have declined over 65% year-to-date, with InvestingPro data showing the stock is currently in oversold territory. Cheng’s commentary followed Xencor’s recent focus on the immunological aspects of its research and development portfolio, particularly after the update from the Phase 1 XmAb942 (TL1A) program last week. While the company maintains a strong liquidity position with a current ratio of 6.61 and more cash than debt on its balance sheet, InvestingPro analysis indicates the company is quickly burning through its cash reserves.
The analyst noted that the next major catalysts for Xencor are expected to occur as previously scheduled, based on a mid-April discussion with the company’s CEO. The Phase 2b XENITH-UC study is anticipated to commence in the second half of the year. Additionally, the First-In-Human trial for the bispecific (TL1AxIL-23) program is planned to start next year.
Cheng also mentioned the oncology portfolio, specifically XmAb819 (ENPP3xCD3), where initial Phase 1 data for renal cell carcinoma (RCC) is expected in the second half of the year. While the first-quarter print did not offer extensive details on the oncology side, the anticipation for initial data remains.
The first quarter was deemed a non-event for Xencor, with results meeting expectations. Cheng highlighted the significant value within Xencor’s platform and noted that investor attention in the near term will likely be on the strategic execution and direction of the company’s portfolio.
In closing, Cheng stated that the updated model includes first-quarter results and a moderated expense projection that aligns with the current run rate. The Overweight rating is sustained, with a revised price target set for December 2025 at $20, down from the previous target of $23. According to InvestingPro analysis, Xencor appears undervalued at current levels, with 10+ additional ProTips and comprehensive financial metrics available to subscribers through the Pro Research Report.
In other recent news, Xencor Inc . announced that it will advance its investigational anti-TL1A antibody, XmAb942, into a Phase 2b study for moderate-to-severe ulcerative colitis. This follows positive interim results from a dose-escalation study indicating the drug’s tolerability and suitable dosing interval. Meanwhile, William Blair initiated coverage on Xencor with an Outperform rating, citing the potential of the company’s pipeline to produce distinctive clinical data in the next 6 to 12 months. The firm’s analysts are particularly optimistic about Xencor’s XmAb technology and its applications in cancer treatment.
Additionally, Xencor disclosed that it will restate its financial statements for the fiscal year ended December 31, 2023, and subsequent quarterly periods due to errors in accounting for a royalty transaction and tax misstatements. The company identified an understatement of accounts receivable and an overstatement of deferred income, among other financial inaccuracies. Despite these errors, Xencor stated that its reported cash and marketable securities remain unaffected, and the restatement is not expected to materially impact future business operations. The company is working with its independent registered public accounting firm, RSM US LLP, to address these issues.
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