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On Monday, Goldman Sachs reaffirmed its Buy rating and $45.00 price target for Day One Biopharmaceuticals (NASDAQ:DAWN), following the company's financial results which surpassed expectations. Day One reported significant revenue from the initial sales of Ojemda, with figures reaching $8.2 million, well above the consensus estimates of $1.1 million to $1.0 million. The strong sales include inventory stocking of $2.1 million, which is anticipated to normalize to two to four weeks of inventory on hand in the second half of 2024.
The robust sales performance was attributed to substantial patient demand, with 157 patients receiving the drug, including both those who switched from the early access program (84) and new patients (73). The company also saw a positive response from healthcare providers, with over 100 prescribers to date, and favorable insurance coverage decisions, with more than 70% of Medicaid and commercial patients receiving approval.
Goldman Sachs noted the early success of Ojemda's market introduction and pointed to discussions with key opinion leaders that suggest a strong willingness to prescribe the drug. The high recurrence rates in pediatric low-grade glioma (pLGG) patients indicate a potential for patients to switch to Ojemda. Long-term data from the FIREFLY-1 study, which shows a median treatment duration of 23.7 months as of May 10, 2024, further supports the possibility of extended use and positions Ojemda as a potential blockbuster with an estimated peak sales of $1.2 billion in the U.S. market for relapsed/refractory pLGG.
In addition to the financials, Day One Biopharmaceuticals provided updates on its product pipeline. The company has recently acquired DAY301, a promising PTK7-targeting antibody-drug conjugate (ADC) for solid tumors. The first patient is expected to be dosed in the Phase 1/2a trial by the fourth quarter of 2024 or the first quarter of 2025. This development adds another layer of potential growth for the biopharmaceutical company as it continues to expand its portfolio of cancer treatments.
In other recent news, Day One Biopharmaceuticals secured approximately $175 million in an oversubscribed private placement, with the funds set to be used for enhancing commercial capabilities, research and development, and potential strategic acquisitions. The company also sold its Priority Review Voucher for a substantial $108 million, intending to support the launch of its drug, OJEMDA, and further invest in cancer treatment development.
In terms of clinical developments, Day One updated its ongoing FIREFLY-2 Phase 3 clinical trial, which evaluates tovorafenib as a first-line therapy for pediatric low-grade glioma. The revisions include a new dosing regimen and the addition of a once-monthly carboplatin regimen as a fourth standard of care option, following feedback from the U.S. Food and Drug Administration.
In the analyst realm, Piper Sandler reaffirmed its Overweight rating on the company, citing strong early utilization of Ojemda and expecting the second quarter results to likely exceed expectations. H.C. Wainwright adjusted the price target for Day One Biopharmaceuticals, reducing it to $40.00 from $50.00 but maintained a Buy rating. Lastly, Jones Trading increased its stock price target for the company to $38.00 following FDA's approval of OJEMDA. These are the recent developments for Day One Biopharmaceuticals.
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