November 28, 2020

Market and Financial News Aggregator

Is Five Prime Stock a Buy Right Now? This Is What You Need To Know

2 min read

Change is in the air. A new President-elect and the possibility of an end to the pandemic. Some things, however, will always stay the same.

Like small cap biotech stocks skyrocketing following the announcement of positive clinical trial results. Case in point: Five Prime Therapeutics (FPRX) shares took off in Wednesday’s trading as much as 349%, after the company disclosed that bemarituzumab, its stomach cancer drug candidate, beat the placebo in a midstage trial.

Specifically, in the Phase 2 study (FIGHT) assessing a blend of bemarituzumab and chemo regimen mFOLFOX6 in patients with fibroblast growth factor receptor 2b-positive (FGFR2b+), non HER2-positive (non HER2+) advanced gastric or gastroesophageal junction (GEJ) cancer, the treatment met all primary and secondary efficacy endpoints.

Next up, following further analysis, FPRX will present the data at forthcoming medical meetings, after which the company will meet with regulators to discuss the next step.

The company believes that in the frontline setting, the therapy could reach approximately 200,000 patients across the globe. While those suffering from gastric cancer in the US is rather small (approximately 27,000), the figures are more substantial in Europe (44,000) and significantly higher in the rest of the world, particularly in China.

Five Prime also noted that bemarituzumab might be able to treat a variety of solid tumors, such as ovarian cancer, triple negative breast cancer, pancreatic cancer, and intrahepatic cholangiocarcinoma.

Among the fans is Cowen analyst Boris Peaker who believes the data supports “further clinical development.”

The 5-star analyst added, “We expect that a pivotal Ph3 trial could take ~2 years, with ~6 months for review, putting approval at ~3 years (YE23) as our base case scenario… We estimate approval in ~3 years with US/EU peak sales potential of ~$700M. This implies significant upside to the stock at current MCap of ~$200M.”

Accordingly, Peaker reiterated an Outperform (i.e. Buy) rating without suggesting a price target. (To watch Peaker’s track record, click here)

Only two other analysts have posted a FPRX review recently, one suggesting a Buy while the other saying Hold. Therefore, the stock has a Moderate Buy consensus rating, backed by a $10 average price target. However, following Wednesday’s share gains, the figure suggests downside of 44% in the year ahead. It will be interesting to see whether any analysts update their FPRX models shortly. (See FPRX stock analysis on TipRanks)

To find good ideas for healthcare stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

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.

2020-11-11 14:00:48

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