Stock market today: Stocks fall as investors rotate out of tech into Jackson Hole
On Wednesday, TD Cowen analysts increased their price target for Spring Works Therapeutics (NASDAQ:SWTX) shares to $66.00 from $63.00, while maintaining a "Buy" rating on the stock. The company’s shares, currently trading at $57.65, have surged over 34% in the past week, according to InvestingPro data. The adjustment reflects positive expectations following the approval of Gomekli for adult and pediatric patients with Neurofibromatosis type 1-related plexiform neurofibromas (NF1-PN).
In a statement, TD Cowen analysts highlighted Gomekli’s safety profile, which they believe sets it apart from AstraZeneca’s (NASDAQ:AZN) Koselugo. They noted that Gomekli does not have gastrointestinal toxicity, creatine phosphokinase (CPK) increase, vitamin E increase or related bleeding, or drug-drug interactions (DDIs), although it does carry an embryo-fetal toxicity warning. The success of Koselugo, which is approved for pediatric use only, was seen as an indicator of the substantial global market opportunity for NF1-PN treatments. Spring Works maintains impressive gross profit margins of 94.5% and shows strong financial health according to InvestingPro’s comprehensive analysis.
Analysts also commented on the potential acquisition of Spring Works Therapeutics by Merck (NSE:PROR) KGaA. They suggested that a takeover could be valued between $6 billion and $7.5 billion, or $80 to $100 per share, which would be a reasonable price based on the projected peak sales of $1.5 billion at a multiple of 4-5 times.
The analysts’ revised price target of $66 takes into account these factors, as well as the anticipated European Union approval and launch of Gomekli in late 2025. The discussions between Merck KGaA and Spring Works Therapeutics regarding the acquisition were also factored into the new valuation.
In other recent news, SpringWorks Therapeutics has been making significant strides. The FDA approved the company’s drug, GOMEKLI, for the treatment of neurofibromatosis type 1. This approval, based on the Phase 2b ReNeu trial results, has been met with optimism, especially as it comes with a rare pediatric disease priority review voucher valued at around $100 million. TD Cowen analyst Yaron Werber noted the differentiated label of GOMEKLI compared to AstraZeneca’s Koselugo, particularly in adult patients.
Simultaneously, Merck KGaA, a Germany-based life-sciences and chemicals company, announced advanced discussions regarding a potential acquisition of SpringWorks Therapeutics. This development comes on the heels of SpringWorks’ recent launch of its inaugural drug, Ogsiveo, and its application for mirdametinib, a potential treatment for the rare genetic disorder neurofibromatosis type 1.
In other analyst news, Guggenheim maintained a positive outlook on SpringWorks, adjusting the company’s price target slightly, while Evercore ISI initiated coverage with an Outperform rating and a price target of $60.00. H.C. Wainwright, on the other hand, reduced its price target to $74.00 from the previous $76.00, following SpringWorks’ third-quarter financial report, but maintained a Buy rating on the stock. These are recent developments that are shaping the trajectory of SpringWorks Therapeutics.
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