On Friday, Ladenburg Thalmann adjusted its outlook on Acrivon Therapeutics Inc (NASDAQ:ACRV) stock, reducing the price target to $14 from $18, while continuing to recommend a Buy rating on the stock. The revision comes as the firm expresses concerns about the forthcoming data release for Acrivon's prexasertib, expected in the first half of 2024.
The analyst from Ladenburg Thalmann indicated growing skepticism regarding the anticipated results from the prexasertib trial. The trial, which is in phases 1b/2 and is open-label, has not yet reported significant responses, leading to the assumption that results may not meet expectations. In previous studies, prexasertib demonstrated an objective response rate (ORR) of 15-20% in patients with high-grade serous ovarian cancer, and Acrivon's OncoSignature CDx was projected to enhance these responses.
The current patient population for the trial may have been treated more aggressively in earlier lines of therapy, which could necessitate a reevaluation of baseline assumptions, potentially lowering the expected ORR to 5-10%. Although the OncoSignature CDx is anticipated to improve outcomes, the extent of this improvement remains uncertain.
Another factor contributing to the potentially subdued response to prexasertib could be related to prior treatments with bevacizumab. Past trials indicated better outcomes when patients received bevacizumab before prexasertib, but some patients in the current study may not have been exposed to bevacizumab, which could influence results.
In light of these concerns and the lack of commitment from Acrivon to present at upcoming medical conferences regarding prexasertib, Ladenburg Thalmann has reduced the probability of success (PoS) for prexasertib from 50% to 40%. This reassessment of the drug's prospects has led to the lowered price target of $14 for Acrivon Therapeutics' stock at this time.
InvestingPro Insights
In light of Ladenburg Thalmann's revised outlook on Acrivon Therapeutics Inc (NASDAQ:ACRV), a look at the latest InvestingPro data and tips could provide additional perspective for investors. Acrivon holds a market cap of $151.44 million, and while it boasts more cash than debt on its balance sheet, the company is quickly burning through cash with an operating income of -$67.1 million for the last twelve months as of Q4 2023. This financial position aligns with the concerns raised about the forthcoming data release for Acrivon's prexasertib.
InvestingPro Tips reveal that analysts have revised their earnings downwards for the upcoming period and do not anticipate the company will be profitable this year. This sentiment is reflected in the company's negative P/E ratio of -2.61 and a PEG ratio of -0.04, indicating challenges in growth expectations. Despite these hurdles, Acrivon has experienced a strong return over the last three months, with a 46.71% price total return, although the one-year price total return shows a decline of -35.3%.
For investors seeking more comprehensive analysis, there are additional InvestingPro Tips available that delve into Acrivon's financial health and market performance. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and gain access to these insights that may further inform investment decisions.
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