Jones Trading Starts ORIC Pharamceuticals (ORIC) at Buy

Jones Trading analyst Soumit Roy initiates coverage on ORIC Pharamceuticals (NASDAQ: ORIC) with a Buy rating and a price target of $17.00.

The analyst comments "ORIC Pharmaceuticals is focused on developing clinical stage targeted therapeutics to overcome resistance in genetically defined NSCLC and in broad metastatic prostate cancer patients. ORIC has a highly experienced management team, including Jacob Chacko (CEO) and Pratik Multani (CMO) with a successful track record developing entrectinib at Ignyta (acquired by Roche for $1.7BN in 2018), receiving tumor agnostic label in genetically defined cancers. We see a similar tack in ORIC's development plan, targeting EGFR/HER2 ex20ins and EGFR atypical mutated non-small cell lung cancer (NSCLC). Despite a crowded EGFR/HER2 space in NSCLC, we see clear signs of differentiation with specificity, breadth of mutation coverage and safety profile. As evident from Alecensa's sale of $1.7BN in 2023 in ALK+ NSCLC (~3-5% of NSCLC), we could see similar market opportunity for ORIC's '114 despite a crowded space. Better safety profile allows for combination approaches, and recent FDA approval supports the use of two EGFR targeting therapies to deepen response in EGFR mutated NSCLC. EZH2/PRC2 space is heating up. Pfizer's 3Q24 earnings call highlighted mevrometostat—(1) initiated two Phase 3 trials in mCRPC with mevrometostat + Xtandi based on the Phase 2 data, and (2) randomized Phase 2 data with mevrometostat + Xtandi in mCRPC likely at ASCO-GU (Feb 13-15, 2025). ORIC's second asset is targeting EED subunit of PRC2 for prostate cancer patients, in-licensed from Mirati. We expect more prostate cancer patients to be treated with AR inhibitors at earlier stages of disease, as advanced stage tumors shift towards AR independence. We expect that based on Phase 1b data, ORIC might move to earlier line settings. We project probability adjusted WW peak sales of approx. $350MN in 2035 in r/r metastatic NSCLC with EGFR/HER2 ex20ins or atypical EGFR mutations, and approx. $575MN in 2036 in mCRPC post Zytiga. With 12+ months of cash, an experienced management team, and several data updates expected in 2025, we are initiating on ORIC with a BUY rating and $17 PT."

For an analyst ratings summary and ratings history on ORIC Pharamceuticals click here. For more ratings news on ORIC Pharamceuticals click here.

Shares of ORIC Pharamceuticals closed at $9.00 yesterday.

You May Also Be Interested In