Things can change quickly on Wall Street, and doubly so in the stock market’s most volatile segment – the biotech sector.
For evidence look no further than the recent performance of Innate Pharma (IPHA). Last week’s hefty 73% share haul lifted the stock from deep in the red in 2021 to overwhelmingly positive territory.
The stock’s lift off commenced after the company announced two presentations to be made at the European Society for Medical Oncology (ESMO) meeting.
On September 18, Innate will announce pre-clinical results for its next-gen NK cell engager platform, ANKET. The day beforehand, partner AstraZeneca will reveal data from the COAST Phase 2 trial showing the progression-free survival (PFS) results in non-small cell lung cancer (NSCLC) for durvalumab combinations with Innate’s monalizumab and its own anti-CD73 monoclonal antibody oleclumab.
It is the latter presentation which Leerink analyst Daina Graybosch is especially looking forward to.
“Bottom Line,” the analyst says, “We were encouraged by the language in the press releases from Innate Pharma (IPHA) and partner AstraZeneca announcing Phase 2 COAST data at the European Society for Medical Oncology (ESMO) meeting. Strong outcome signal would de-risk a large opportunity for monalizumab (anti-NKG2A) and change the narrative around Innate Pharma. We had highlighted this trial as the most important catalyst for our coverage going into ESMO and these encouraging press releases make us more positively inclined.”
Prior to the press blurbs, Graybosch admits that given the mixed data generated “in clinic” to-date by anti-NGK2A + PD(L)1 antagonists, and the lack of prior data from the combination in the post CRT (chemoradiation) stage 3 NSCLC setting being tested in the COAST trial, expectations for the monalizumab arm “were generally low.”
Graybosch highlights the fact the “positive language” in the AstraZeneca press release concerning the COAST study does not differentiate between the monalizumab and oleclumab (CD73 antagonist) arms. Therefore, given historical experience, the analyst “leans against oleclumab being the contributor (or at least sole contributor) of good results.”
The positivity extends to a rerating of the stock. Graybosch upgrades IPHA shares from Market Perform (i.e., Hold) to Outperform (i.e., Buy). Following last week’s surge, there’s room for another 12% uptick. (To watch Graybosch’s track record, click here)
Two other recent reviews are also positive, making the analyst consensus on this stock a Strong Buy. IPHA’s share appreciation has pushed the stock price close to the $6.47 average target, leaving room for just 3.5% upside from the $6.25 current trading price. (See IPHA stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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