Leerink cuts Boundless Bio stock rating on program setback

On Wednesday, Leerink Partners issued a downgrade for Boundless Bio Inc. (NASDAQ:BOLD) stock, changing its rating from Outperform to Market Perform. The firm also significantly reduced the price target to $3.00 from the previous $15.00. The stock, currently trading at $1.30, has experienced significant pressure, falling nearly 22% in the past week and 86% over the last year, according to InvestingPro data. The adjustment follows a reassessment of the company’s lead CHK1 inhibitor program and its potential in the oncology market.

Leerink Partners’ decision is based on the recent shift in Boundless Bio’s development strategy, which they believe represents a major setback. The CHK1 inhibitor was anticipated to drive clinical responses in oncogene-amplified tumors. However, the need to return to proof-of-principle studies and dose-optimization has dampened expectations.

The delay in validating the ecDNA hypothesis with the ECHO diagnostic tool has also contributed to the downgrade. This delay suggests that the investment thesis for Boundless Bio might remain uncertain until either a new asset, like the BBI-940 kinesin degrader expected to be introduced in the first half of 2026, is developed, or until the company can prove that the ’355 compound in combination with ’825 is differentiated from other CHK1 inhibitors.

Leerink Partners has removed all value from the CHK1 program from their valuation until Boundless Bio can validate the new combination hypothesis in specific tumor types. Additionally, the firm has updated its expense expectations for Boundless Bio, reflecting the approximately one-third reduction in workforce and extending the company’s financial runway into the first half of 2028, rather than the previous estimate of 2027. InvestingPro analysis shows the company maintains a strong liquidity position with a current ratio of 22.15, though it’s quickly burning through cash. The company’s market capitalization currently stands at $29.1 million.

The downgrade and price target reduction reflect Leerink Partners’ cautious stance as Boundless Bio navigates through these developmental challenges and seeks to validate its revised approach in the competitive oncology market. While current market sentiment appears negative, InvestingPro analysis suggests the stock may be undervalued, with additional insights and 11 more ProTips available to subscribers, including detailed financial health metrics and growth potential indicators.

In other recent news, Boundless Bio, Inc. has announced an agreement to potentially sell up to $14.5 million of its common stock. This deal, made with Jefferies LLC, involves an Open Market Sale AgreementSM, allowing for "at the market offerings" where shares may be sold at market prices or as negotiated. Jefferies will act as the sales agent or principal, earning up to a 3% commission on the gross proceeds from any sales. However, there is no obligation for either party to proceed with the sale or purchase, and there is no guarantee that any sales will occur. The shares will be issued under a shelf registration statement on Form S-3, which is pending approval from the Securities and Exchange Commission (SEC). Boundless Bio has agreed to indemnify Jefferies against certain liabilities related to the Securities Act of 1933 and the Securities Exchange Act of 1934. Either party can terminate the agreement with prior written notice. The company has not disclosed how it plans to use any proceeds from the potential stock sale.

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