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Investing.com - Morgan Stanley downgraded Erasca Inc (NASDAQ:ERAS) from Overweight to Equalweight and lowered its price target to $2.00 from $4.00 on Monday. The stock, currently trading at $1.64 with a market capitalization of $465 million, has seen a challenging year with a decline of nearly 35% year-to-date, according to InvestingPro data.
The downgrade comes despite recent progress with the company’s investigational new drug (IND) filings for pan-RAS molecular glue ERAS-0015 and pan-KRAS inhibitor ERAS-4001, both of which have been cleared by regulators. While Erasca currently projects its cash runway to extend into the second half of 2028, InvestingPro analysis indicates the company is quickly burning through cash, though it maintains more cash than debt on its balance sheet.
Morgan Stanley cited the extended timeline for clinical data as a key factor in its rating change, noting that initial clinical results for both ERAS-0015 and ERAS-4001 are not expected until 2026. The Phase 1 AURORAS-1 and BOREALIS-1 trials will evaluate these compounds as monotherapies.
In May, Erasca announced its strategic decision to pursue partnership opportunities for naporafenib, another compound in its pipeline. Phase 3 randomized dose optimization data for naporafenib had previously been expected in the second half of 2025.
While Morgan Stanley acknowledged the "scientific merit and clinical potential" of Erasca’s programs and expressed encouragement about results from later-stage programs like RMC-6236, the firm indicated it sees "better opportunities" in its coverage universe this year until there is "greater clarity on the clinical profiles and registrational path opportunity" for Erasca’s pipeline candidates.
In other recent news, Erasca, Inc. announced that the U.S. Food and Drug Administration (FDA) has granted clearance for Investigational New Drug (IND) applications for two of its cancer therapies, ERAS-4001 and ERAS-0015. This significant regulatory approval allows Erasca to commence clinical trials for these treatments aimed at KRAS-mutant solid tumors. ERAS-4001 is highlighted as a potential first-in-class pan-KRAS inhibitor, targeting multiple KRAS mutations and wildtype KRAS, and is designed to address treatment resistance in approximately 2.2 million people diagnosed with KRAS-mutant tumors globally each year. The upcoming BOREALIS-1 Phase 1 trial will focus on evaluating the safety, tolerability, and initial effectiveness of ERAS-4001. These developments mark an important step for Erasca in advancing its precision oncology pipeline.
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