On Monday, EF Hutton adjusted its price target for Apollomics Inc. (NASDAQ:APLM), a biopharmaceutical company, from $11.00 to $6.50, while maintaining a Buy rating on the stock.
The revision reflects concerns over the potential delay in U.S. FDA approval and commercialization for the company's Vebreltinib, an investigational treatment for non-small cell lung cancer (NSCLC) and other solid tumors with MET dysregulation.
The analyst cited uncertainty regarding how the FDA might interpret data from the Chinese KUNPENG trial. However, they highlighted the ongoing SPARTA Phase 2 study, which is investigating Vebreltinib's efficacy and safety across 13 countries at over 90 centers. The management of Apollomics believes that the treatment could address the unmet medical need for retreated NSCLC patients with c-Met amplification, potentially improving upon current therapies.
The company anticipates releasing more interim data from the SPARTA study this summer, which could serve as a significant catalyst for Apollomics' stock. The global scope of the SPARTA study has already been independently vetted, adding credibility to the forthcoming data.
The revised price target takes into account an expected delay in FDA approval and subsequent commercialization by one year, due to a request for more patient enrollment. This postponement shifts revenue forecasts out by a full year, negatively affecting the price target.
Additionally, the analyst has increased the discount rate by nearly 1% and incorporated the possibility of equity dilution from the issuance of additional common stock shares by early 2025. Despite these concerns, the firm's cash balance is projected to last until March 2025, providing some financial stability in the near term.
InvestingPro Insights
With real-time data from InvestingPro, we can glean further into Apollomics Inc.'s financial health and market performance. The company's market capitalization stands at a modest $67.15 million, and it holds the advantageous position of having more cash than debt on its balance sheet. This is a positive sign for investors, as it suggests a level of financial stability, especially important for a biopharmaceutical company facing regulatory hurdles and potential delays in product commercialization.
Interestingly, despite the challenges, analysts anticipate sales growth in the current year, which could be reflective of the company's broader pipeline and market confidence in its future performance. However, it's important to note that Apollomics is not expected to be profitable this year, and it has not been profitable over the last twelve months, which aligns with the typical lifecycle of a biopharmaceutical company in the development stage. The stock has experienced a significant return over the last week, indicating market reactions to short-term events or news.
For investors seeking a more comprehensive analysis, there are additional InvestingPro Tips available that could shed light on Apollomics' valuation and future prospects. For example, analysts have noted that the company's liquid assets exceed short-term obligations, which is crucial for its operational sustainability. Discover more in-depth insights and tips on Apollomics Inc. by visiting InvestingPro, and use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 8 more InvestingPro Tips available, which could be invaluable for those considering an investment in Apollomics.
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