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On Thursday, H.C. Wainwright maintained a Buy rating and a price target of $5.00 on Adagene Inc (NASDAQ:ADAG), following the company's presentation of updated data at the annual congress of the European Society of Medical Oncology (ESMO) held on September 16. The data came from an ongoing Phase 1/2 study of ADG126, Adagene's anti-CTLA-4 monoclonal antibody, and showed positive results in metastatic microsatellite stable colorectal cancer (MSS-CRC) patients without liver metastases.
Despite the encouraging data, Adagene's stock experienced a significant drop of 33.2% over the last two trading days, a decline deemed unwarranted by the analyst, especially when compared to the 0.3% drop in the NBI index. This recent decrease in stock value is seen as an attractive entry point for long-term investors.
The study in question evaluates the efficacy of ADG126 in combination with pembrolizumab. Earlier in the year, at the American Society of Clinical Oncology (ASCO) Gastrointestinal (GI) Cancers Symposium in January 2024, Adagene reported that the combination treatment achieved an overall response rate (ORR) of 22% and a disease control rate (DCR) of 100% in nine evaluable patients.
The updated data presented at ESMO further validated ADG126's therapeutic potential, with a confirmed ORR of 24% and a DCR of 88% in patients treated with the combination. Additionally, the preliminary overall survival analysis revealed encouraging rates at 6, 9, and 12 months among all evaluable patients.
The analyst expressed a reinforced confidence in ADG126's potential for treating MSS-CRC without liver and peritoneal metastases. Given the promising results and the current market capitalization of approximately $100 million, the stock is considered undervalued.
In other recent news, Adagene Inc. has reported significant results from a recent study on its proprietary therapeutic, ADG126.
The study, presented at the ESMO Congress, demonstrated the effectiveness of ADG126, a novel anti-CTLA-4 SAFEbody®, in combination with KEYTRUDA® (pembrolizumab) for treating advanced/metastatic microsatellite-stable colorectal cancer (CRC). The combination therapy showed a favorable safety profile and therapeutic potential, positioning ADG126 as a potentially best-in-class treatment option.
These developments could offer a new avenue for CRC patients who typically have limited treatment options. The company's commitment to research in the oncology field, particularly through the use of SAFEbody® technology, is further emphasized by these findings. The implications of this study may resonate throughout the global medical community, potentially impacting the competitive landscape of CRC treatments.
InvestingPro Insights
As investors consider H.C. Wainwright's positive outlook on Adagene Inc (NASDAQ:ADAG), they can complement this analysis with insights from InvestingPro. Adagene's financials reflect a challenging landscape, as evidenced by a significant revenue drop of 96.4% over the last twelve months as of Q2 2024. This stark decrease in revenue is indicative of the hurdles the company faces, aligning with the InvestingPro Tip that Adagene is quickly burning through cash. Furthermore, the company's market capitalization stands at a modest $93.85M, suggesting a niche presence in its industry.
Despite the stock's recent volatility, with a 29.1% decline over the past week, Adagene holds more cash than debt on its balance sheet, which may provide some financial flexibility in its operations. The company's stock has also delivered a high return over the last year, up by 51.43%, highlighting a potential silver lining for long-term investors amidst the current volatility. Adagene's valuation implies a poor free cash flow yield, as per another InvestingPro Tip, which is a critical factor for investors to consider when assessing the company's future growth prospects.
For investors seeking a more comprehensive analysis, there are additional InvestingPro Tips available. These tips provide deeper insights into Adagene's financial health and market performance, which could be pivotal in making informed investment decisions. To explore these further, interested parties can find a wealth of information on the InvestingPro platform.
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