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SOUTH SAN FRANCISCO - ALX Oncology Holdings Inc. (NASDAQ:ALXO), currently valued at $32 million, has announced that its Phase 2 clinical trials, ASPEN-03 and ASPEN-04, did not meet primary endpoints when combining its drug evorpacept with Merck’s KEYTRUDA® (pembrolizumab) for treating advanced head and neck squamous cell carcinoma (HNSCC). The trials aimed to improve objective response rates (ORR) but did not show sufficient efficacy to proceed to registrational studies. According to InvestingPro analysis, the stock is currently trading below its Fair Value, despite having fallen over 96% in the past year.
Despite these results, ALX Oncology remains optimistic about evorpacept’s potential in other cancer treatments. The drug, which blocks the "don’t eat me" signal cancer cells use to avoid immune detection, has shown promising outcomes in combination with anti-cancer antibodies in different types of cancer, including HER2-positive gastric and breast cancers. InvestingPro data shows the company maintains a strong liquidity position with a current ratio of 7.26, though it’s currently burning through cash at a significant rate. InvestingPro subscribers can access 10 additional key insights about ALXO’s financial health.
The company has decided to discontinue the combination of evorpacept with pembrolizumab for HNSCC, but will continue to explore its use with other anti-cancer antibodies. Evorpacept’s unique ability to stimulate macrophages to attack cancer cells selectively has been supported by durable clinical responses and a consistent safety profile in prior trials.
ALX Oncology’s Chief Medical Officer, Dr. Alan Sandler, expressed disappointment for patients needing more effective treatments but reaffirmed the company’s commitment to pursuing other clinical avenues for evorpacept. CEO Jason Lettmann also highlighted the drug’s robust clinical data and the company’s intention to advance clinical programs in breast and colorectal cancer.
Detailed findings from the ASPEN-03 and ASPEN-04 trials will be presented at a future medical meeting. Evorpacept is also being evaluated in colorectal cancer, non-Hodgkin lymphoma, and multiple myeloma. The U.S. FDA has granted evorpacept Fast Track designation for the treatment of HER2-positive gastric or GEJ carcinoma, and it has received Orphan Drug Designation in the U.S. and Europe. With the next earnings report scheduled for May 8, 2025, investors following InvestingPro metrics note the company’s overall financial health score remains weak, though it maintains more cash than debt on its balance sheet.
This news is based on a press release statement from ALX Oncology.
In other recent news, ALX Oncology Holdings Inc. has received FDA clearance for its Investigational New Drug application for ALX2004, a novel antibody-drug conjugate targeting solid tumors with EGFR expression. The company plans to initiate Phase 1 trials in mid-2025. Meanwhile, ALX Oncology announced a strategic workforce reduction of approximately 30% to prioritize its product pipeline and conserve cash, with completion expected by May 2025. The departure of President and Chief Scientific Officer Dr. Jaume Pons was also disclosed, with severance arrangements in place.
In terms of analyst activity, Jefferies upgraded ALX Oncology to a Buy with a price target increase to $3.00, citing potential upside from upcoming clinical trial results and a favorable risk/reward balance. Conversely, Stifel reduced its price target to $1.50 while maintaining a Hold rating, expressing concerns over development strategies and regulatory risks. UBS also revised its price target to $2.20 but maintained a Buy rating, emphasizing the need for further investigation of evorpacept in HER2-positive gastric cancer. These developments reflect ongoing evaluations of ALX Oncology’s strategic and clinical directions.
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