On Friday, Repare Therapeutics (NASDAQ:RPTX) saw its stock rating downgraded by Bloom Burton & Co. from Buy to Hold. The revision reflects the absence of human data for the company's drugs RP-3476 and RP-1664. Bloom Burton's analysts have expressed the need for results that would clarify the potential of Repare's early-stage assets before assigning a new target price.
The downgrade comes despite Repare Therapeutics being adequately funded to reach milestones that could potentially add value to its drugs RP-3476 and RP-1664. InvestingPro data shows the company maintains a strong current ratio of 6.45, with more cash than debt on its balance sheet. However, the company is quickly burning through cash, with an EBITDA of -$90.24 million in the last twelve months.
Previously, the company's valuation was heavily based on the forecasted sales of lunresertib and camonsertib. With the current lack of human data for the newer drugs, the analysts have opted to remove the target price for RPTX shares until more information becomes available.
Bloom Burton's analysts have indicated that the rating change to HOLD (Speculative) from the previous BUY status was a necessary adjustment. This decision is a direct response to the current stage of development for Repare's drugs, as the company transitions its focus from established products to those still in the earlier phases of development.
In their statement, the analysts mentioned, "While Repare is funded to potentially value-creating milestones for RP-3476 and RP-1664, we have not yet seen human data for these drugs. As a result, and because our valuation of RPTX has, until now, been based on forecast lunresertib and camonsertib sales, we are removing a target price for RPTX shares pending results that give us visibility into the potential of the company's earlier assets."
Investors are now awaiting further developments and clinical data that could provide a clearer picture of Repare Therapeutics' future prospects and the potential market performance of its early-stage drugs.
The next set of results, expected on March 4, 2025, will be crucial in determining the direction of the company's stock and the reinstatement of a target price by analysts. For deeper insights into RPTX's valuation metrics and financial health indicators, visit InvestingPro, where subscribers can access comprehensive analysis and real-time alerts.
In other recent news, Repare Therapeutics has reported significant progress in its clinical trials. The company's MYTHIC Phase 1 clinical trial, evaluating a drug combination for endometrial cancer and platinum-resistant ovarian cancer, showed a 25.9% overall response rate in endometrial cancer and 37.5% in platinum-resistant ovarian cancer.
Repare Therapeutics plans to initiate a Phase 3 trial for the drug combination in endometrial cancer in the second half of 2025. Furthermore, the company has partnered with the US National Cancer Institute's Cancer Therapy Evaluation Program to advance the development of its anticancer drug camonsertib.
Stifel recently adjusted the financial outlook for Repare Therapeutics, reducing the price target to $4 from the previous $9, while still retaining a Buy rating on the stock. Lastly, Repare Therapeutics has shifted its research and development focus, expecting to result in significant annual cost savings of around $15.0 million and extend the company's cash runway into the second half of 2026.
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