On Friday, Stifel analysts maintained a Hold rating on ALX Oncology (NASDAQ:ALXO), currently trading at $1.50 with a market cap of $79.1 million, maintaining a steady price target of $3.00. According to InvestingPro data, the stock has experienced significant pressure, falling nearly 89% over the past year. InvestingPro analysis suggests the stock may be undervalued at current levels. The firm’s analysis followed the release of ALX Oncology’s final randomized HER2+ gastric data, which indicated that evorpacept (CD47) could provide additional benefits when used as a combination drug. The data showed that the outcomes were not influenced by the underperformance of the control arm, which aligned with results from the HERRAM study. InvestingPro data reveals the company maintains a strong liquidity position with a current ratio of 4.82, though it’s currently experiencing rapid cash burn.
The analysts noted that the higher objective response rate (ORR) and duration of response (DoR) helped explain the progression-free survival (PFS) advantage observed in the study. Nevertheless, they pointed out a slight imbalance in prior therapies that favored evorpacept. The evaluation also touched upon the uncertainty regarding ALX Oncology’s future plans, as the market anticipates further regulatory and strategic announcements in the upcoming months.
The report also brought up discussions about patient selection strategies. Specifically, the inclusion of circulating tumor DNA positive (ctDNA+) patients without recent biopsy confirmation might lead to a trade-off between a larger eligible commercial patient population and potentially reduced efficacy.
Despite these considerations, Stifel expressed a cautiously optimistic outlook. The analysts mentioned that several key questions from the interim update have been addressed, enhancing their perspective on the stock. The broader analyst community maintains varied price targets ranging from $2 to $25, reflecting the uncertainty ahead of the February strategy update. InvestingPro subscribers can access additional insights, including 8 more key tips about ALXO’s financial health and market position.
In other recent news, ALX Oncology has made several significant developments. The company reported positive results from its Phase 2 ASPEN-06 clinical trial, which evaluated the efficacy of its investigational drug, evorpacept, in patients with HER2-positive advanced gastric cancer. The U.S. Food and Drug Administration granted Fast Track designation for evorpacept, further highlighting its potential as a second-line treatment.
Cantor Fitzgerald reaffirmed its Overweight rating on ALX Oncology, following the presentation of the ASPEN-06 study results. Stifel analysts also expressed a positive view on the new data, highlighting promising results for confirmed HER2+ patients. However, H.C. Wainwright analysts reduced their price target for ALX Oncology to $5, while maintaining a Buy rating, and Jefferies downgraded ALX Oncology’s stock from ’Buy’ to ’Hold’, reducing the price target from $12.00 to $2.00 due to uncertainty in the company’s 2025 readouts.
In addition, ALX Oncology announced the adoption of a new equity incentive plan, reserving 1.5 million shares of common stock for issuance in various forms of equity awards. Lastly, the company’s Chief Medical (TASE:PMCN) Officer, Sophia Randolph, resigned but will continue to provide consulting services for up to 18 months. These are the recent developments in ALX Oncology.
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