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Investing.com - Leerink Partners has initiated coverage on Adagene Inc (NASDAQ:ADAG) with an Outperform rating and a $7.00 price target, representing significant upside from the current price of $1.90. According to InvestingPro data, the stock trades with high volatility and has shown a strong return over the last three months despite being down 19.5% year-over-year.
The firm’s positive outlook is primarily based on Adagene’s lead program, muzastotug (muza), a conditionally masked CTLA-4 antagonist that has shown proof-of-concept efficacy when combined with PD-1 antagonists in treating relapsed/refractory microsatellite stable, non-liver metastatic colorectal cancer.
Leerink Partners believes muzastotug has a wider therapeutic window compared to unmasked anti-CTLA-4 treatments, positioning it well for development and commercial success in both relapsed/refractory and earlier-line colorectal cancer settings.
The firm also notes that Adagene’s clinical experience with muzastotug demonstrates effective protease-masking and conditional activity of immunotherapy in the tumor microenvironment, which de-risks the company’s development capabilities and SAFEbody platform.
As one of the first Chinese biotech companies to operate simultaneously in China and the United States, Leerink Partners believes Adagene is well positioned to benefit from increased investment in the biotech sector in China. InvestingPro subscribers can access 13 additional tips and comprehensive financial metrics to better evaluate Adagene’s investment potential in this dynamic market.
In other recent news, Adagene Inc. has announced that the U.S. Food and Drug Administration has endorsed its plan to commence a Phase 2 trial for its drug muzastotug in combination with Merck (NSE:PROR)’s pembrolizumab for treating microsatellite stable colorectal cancer. This trial is scheduled to begin in the second half of 2025 and will involve approximately 60 patients. In a strategic move, Adagene has also partnered with ConjugateBio Inc. to provide a proprietary antibody for bispecific ADC development, which includes potential milestone and royalty payments for Adagene. Furthermore, Sanofi (NASDAQ:SNY) has committed to investing up to $25 million in Adagene, which will support the clinical development of muzastotug. Encouraging results from a Phase 1b/2 study were presented at the American Society of Clinical Oncology, showing a 29% overall response rate for Adagene’s ADG126 in combination with pembrolizumab. The study highlighted a favorable safety profile with minimal severe adverse events. These developments underscore Adagene’s ongoing efforts in advancing its therapeutic programs and strategic partnerships.
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