JPMorgan maintains ORIC stock Overweight with $20 target

Tuesday, JPMorgan reaffirmed its Overweight rating and $20.00 price target for ORIC Pharmaceuticals (NASDAQ: ORIC), which currently trades at $5.15. The stock has attracted strong analyst interest, with consensus targets ranging from $12 to $25. According to InvestingPro data, five analysts have recently revised their earnings expectations upward for the upcoming period. The firm’s analysts highlighted the anticipated first half of 2025 update on ORIC-944, emphasizing its potential to demonstrate the clinical and strategic value of the asset. They also noted the proximity of the American Society of Clinical Oncology (ASCO) meeting, scheduled for May 30 to June 3, 2025, suggesting that while ORIC-944 data will not be formally presented at the conference, it may be released around that time through alternative channels.

The update is expected to include data from approximately 12 to 15 patients, including those previously presented at the JPM Healthcare Conference (HCC) on March 6, where ORIC reported confirmed PSA50 and PSA90 responses with ORIC-944 in combination with apalutamide. Similar initial clinical activity was observed with the combination of ORIC-944 and darolutamide. While the company is currently unprofitable, InvestingPro analysis shows ORIC maintains a strong financial position with more cash than debt and a healthy current ratio of 12.0, providing runway for its clinical development programs. JPMorgan mentioned that ORIC has seen strong enrollment in its ongoing ORIC-944 study with AR inhibitor combination, indicating that the patient count could be at the higher end of the range or possibly exceed it.

JPMorgan’s base case scenario for the ORIC-944 update remains unchanged, with expectations of efficacy data around the mevrometostat and Xtandi combination update and improved tolerability. Should the update meet these expectations, JPMorgan predicts ORIC’s stock price could reach the low to mid-teens per share. A more optimistic outcome, which the analysts refer to as a "home run scenario," would demonstrate clear differentiation in efficacy and safety, potentially propelling the stock price into the mid to high-teens per share range. JPMorgan sees a very low probability of a downside scenario characterized by mixed efficacy or safety results.

In conclusion, JPMorgan’s analysis suggests that ORIC’s stock could be valued at approximately 2 to 4 times its current levels to accurately reflect the probability-adjusted potential of ORIC-944 alone. Based on InvestingPro Fair Value calculations, ORIC appears undervalued at current levels, with a market cap of $363 million and beta of 1.36. The firm maintains ORIC on its Analyst Focus List, reaffirming its positive outlook on the stock’s long-term potential.

In other recent news, ORIC Pharmaceuticals has been actively advancing its drug development efforts, particularly with its drug candidate ORIC-944. The company recently presented preclinical data at the American Association for Cancer Research (AACR) Annual Meeting, indicating that ORIC-944, when combined with androgen receptor pathway inhibitors, may improve progression-free survival in prostate cancer models. This development positions ORIC-944 as a potential best-in-class PRC2 inhibitor for prostate cancer treatment. Additionally, H.C. Wainwright raised its price target for ORIC Pharmaceuticals to $22, up from $21, while maintaining a Buy rating, citing several catalysts expected to drive the company’s progress.

These catalysts include the presentation of Phase 1b results for ORIC-114 in various cancer treatments and dose escalation studies for ORIC-944, expected in 2025. Cantor Fitzgerald also maintains an Overweight rating on ORIC Pharmaceuticals, expressing confidence in the potential of ORIC-944 and the company’s management. The analyst highlighted the optimism surrounding the initial positive response rates in PSA readings for ORIC-944. The upcoming weeks are considered pivotal for ORIC as they prepare to release more data on ORIC-944.

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