Raymond James cuts Mural Oncology stock rating, slashes target to $6

On Tuesday, Raymond (NSE:RYMD) James made a significant adjustment to its outlook on Mural Oncology (NASDAQ:MURA), downgrading the biopharmaceutical company’s stock from a ’Strong Buy’ to an ’Outperform’ rating. The firm also drastically reduced its price target for MURA shares from $18.00 to $6.00. The downgrade comes as MURA shares have declined over 9% in the past week, with the company’s market capitalization now standing at approximately $66 million. According to InvestingPro analysis, the stock currently appears undervalued based on its Fair Value metrics.

The downgrade followed an announcement from Mural Oncology regarding the interim overall survival (OS) analysis of their Phase 3 ARTISTRY-7 trial in platinum-resistant ovarian cancer (PROC). According to the company’s press release, the trial did not achieve statistical significance and, as a result, will not progress to a final analysis. Despite these challenges, InvestingPro data shows the company maintains a strong financial position with a current ratio of 5.84, indicating ample liquidity to fund ongoing operations.

Despite the setback, Mural Oncology remains on track to report top-line results from another significant trial. The phase 2 ARTISTRY-6 trial is evaluating nemvaleukin monotherapy in mucosal melanoma, with results expected to be shared in the second quarter of 2025.

The analyst from Raymond James stated, "We are downgrading shares of MURA to an Outperform rating (previously Strong Buy) and are lowering our target price to $6 (previously $18)." This move reflects the reduced confidence in the immediate potential of Mural Oncology’s pipeline following the ARTISTRY-7 trial results.

Mural Oncology’s focus remains on advancing its clinical programs, with the upcoming ARTISTRY-6 trial results being a potential catalyst for the company’s stock performance in the near future. The lowered price target from Raymond James indicates a more cautious optimism about the company’s prospects.

In other recent news, Mural Oncology has announced the discontinuation of its phase 3 ARTISTRY-7 trial for the treatment of platinum-resistant ovarian cancer (PROC). This decision follows an interim analysis that showed no significant improvement in overall survival when using nemvaleukin alfa combined with pembrolizumab compared to chemotherapy alone. As a result, Jones Trading downgraded Mural Oncology’s stock rating from Buy to Hold. The company will now focus on its upcoming Phase 2 trial for mucosal melanoma, with results anticipated in the second quarter of 2025.

Additionally, Morgan Stanley (NYSE:MS) has adjusted its rating for Mural Oncology from Overweight to Equal-weight, reflecting a cautious stance as they await pivotal clinical data. The firm removed the PROC indication for nemvaleukin from its valuation model, setting a new base case valuation range for the stock. In another development, Mural Oncology entered a sales agreement with Jefferies LLC, allowing the company to sell up to $75 million in ordinary shares as part of an "at the market offering."

This agreement provides Mural with flexibility in funding its operations, although there is no obligation to sell shares. The company maintains a solid financial position, with approximately $144.4 million in cash and marketable securities reported at the end of the previous year. Investors are closely watching these developments as Mural navigates its clinical and financial strategies.

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