H.C. Wainwright lowers Sutro Biopharma shares target on Luvelta’s clinical progress



 

On Tuesday, H.C. Wainwright adjusted the price target for Sutro Biopharma shares (NASDAQ:STRO), a clinical-stage drug discovery, development, and manufacturing company.

The firm reduced the price target to $12.00 from the previous $16.00 while maintaining a Buy rating on the company’s stock. The adjustment follows Sutro Biopharma’s ongoing efforts in developing its product Luvelta for platinum-resistant ovarian cancer.

The analyst noted that the registration-directed trial for Luvelta, named REFRαME-O1, is expected to commence in the first half of 2024. The trial will span 140 sites across roughly 20 countries. H.C. Wainwright maintains a positive outlook on the potential of Luvelta, anticipating it to demonstrate significant efficacy in a broader patient population than its competitor, Elahere, particularly in the FolRâº-High expressing setting.

The firm also highlighted safety advantages that Luvelta may have over Elahere, which is currently limited by its labeling to high FolR⺠expressing patients and has associated ocular toxicity concerns. Abbvie’s Elahere, though not rated by the analyst, is noted for these limitations.

Further potential for Sutro Biopharma lies in the expansion of Luvelta’s use to other types of cancers. The analyst underscored the scientific and clinical rationale for investigating Luvelta in endometrial and non-small cell lung cancer (NSCLC), with an Investigational New Drug (IND) submission anticipated in the first half of 2024 for NSCLC.

Finally, the report mentioned that Sutro Biopharma decided not to continue the development of STRO-001 after the termination of a collaboration agreement with BioNova to develop the drug in China. This decision factored into the firm’s reassessment and the subsequent lowering of the price target. Despite this, H.C. Wainwright reaffirmed its Buy rating, indicating confidence in the company’s ongoing projects and future prospects.

InvestingPro Insights

Amidst H.C. Wainwright’s recent price target adjustment for Sutro Biopharma, current InvestingPro data and tips offer additional context for investors monitoring the company’s performance. As of the last twelve months ending in Q4 2023, Sutro Biopharma holds a market capitalization of $199.32 million, reflecting a substantial investor interest in the biotech sector. Notably, the company’s revenue growth has been impressive, with a 126.84% increase over the last year, indicating a strong expansion in its business operations.

From an investment standpoint, two InvestingPro Tips stand out. Firstly, Sutro Biopharma’s balance sheet shows more cash than debt, which is a positive sign of financial health and could provide resilience in a volatile market. Secondly, the stock’s recent performance suggests it is in oversold territory according to the Relative Strength Index (RSI), which might attract investors looking for potential turnaround opportunities.

For those seeking a deeper dive into Sutro Biopharma’s financials and future outlook, InvestingPro offers additional insights. There are 10 more InvestingPro Tips available for STRO at https://www.investing.com/pro/STRO, which could be invaluable for understanding the company’s trajectory. To access these insights, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

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