Nuvalent could be a winning biotech in the world of cancer treatments, according to Jefferies. Analyst Roger Song initiated the clinical-stage biopharmaceutical company with a buy rating and $97 price target, which implies 49.8% potential upside for shares over the next 12 months. “NUVL leverages strong expertise in structure-based chemistry and deep understanding of unmet [patient] needs to develop potentially ‘best-in-class’ small molecule targeted cancer therapy,” Song wrote in a Wednesday note. Nuvalent, which creates precisely targeted therapies for clinically proven kinase targets in cancer, has parallel lead programs for drugs to treat non-small cell lung cancer, or NSCLC, as well as “impressive” data showing high efficacy and good tolerability in later lines, the analyst said. The U.S. Food and Drug Administration granted breakthrough therapy designation to the company on Feb. 27 for the treatment of patients with ROS1-positive NSCLC or ALK+ NSCLC, who have been previously treated with two or more ROS1 tyrosine kinase inhibitors. “We like the co-lead candidates in NSCLC which differentiate from approved/pipeline drugs,” Song said. “We think both candidates poise well in later line and have strong potential to move into frontline treatments.” The analyst estimates Nuvalent’s platform and pipeline value to be worth $300 million. He estimated roughly $1.7 million in U.S. peak probability adjusted Zidesamtinib sales for ROS1+ NSCLC, and about $2.6 billion in U.S. peak probability adjusted NVL-655 sales in ALK+ NSCLC. This year, Nuvalent stock has lost 12.8%. The company posted a fourth-quarter loss that was slightly wider than expected, at 62 cents per share. Analysts polled by FactSet forecast a loss of 60 cents per share. Nuvalent’s research and development expense of $35.6 million for the period was $3.9 million higher than analysts had expected, but Jefferies noted the company has about $720 million in cash on hand, which should fund its operations through 2027.
