On Tuesday, Day One Biopharmaceuticals (NASDAQ:DAWN) saw its price target adjusted by H.C. Wainwright, which brought it down to $40.00 from the previous $50.00, while still maintaining a Buy rating on the stock. This adjustment comes after the company's recent announcement on April 23 about the approval of its drug Ojemda (tovorafenib) for patients with recurrent or refractory pediatric low-grade glioma (LGG) that have specific BRAF genetic alterations.
The focus for Day One now shifts to the execution of Ojemda's market launch and its performance dynamics. The analyst believes that the drug's comprehensive label and favorable safety profile, which lacks any severe warnings or contraindications, could potentially move the stock beyond its 52-week trading range.
However, there is a note of caution regarding the drug's label, which indicates a 15% occurrence of growth impact among patients, with two patients having discontinued use due to this adverse effect. Key opinion leaders (KOLs) consulted by the analyst suggest that this side effect could influence the drug's real-world application, especially if incidents increase.
The revised model from H.C. Wainwright reflects the approval of Ojemda and incorporates the current pricing of $33,916 for a 28-day supply. The analyst has also updated their launch assumptions to include a small initial uptake from Day One's Expanded Access Program (EAP). Although high market penetration among the estimated 26,000 patients with this condition is deemed crucial, the expected peak penetration rate has been reduced from 80% to 60%, informed by discussions with KOLs.
The anticipated duration of therapy, which is a significant factor in meeting future consensus estimates, is now expected to average 24 months. Consequently, the new sales projections for Ojemda are set at $17.8 million for 2024, up from the previous forecast of $4.2 million, with peak sales reaching $1.1 billion by 2034, a decrease from the initially projected $1.4 billion. Despite the lowered price target, H.C. Wainwright reiterates a Buy rating on Day One Biopharmaceuticals' shares.
InvestingPro Insights
As Day One Biopharmaceuticals (NASDAQ:DAWN) navigates the market launch of its newly approved drug Ojemda, investors are closely monitoring the company's financial health and stock performance. According to InvestingPro, Day One holds more cash than debt on its balance sheet, providing a degree of financial flexibility as they roll out their new treatment. However, it's important to note that analysts do not expect the company to be profitable this year, aligning with the company's recent operating income figures showing significant losses for the last twelve months as of Q1 2023.
InvestingPro data highlights that Day One's market capitalization stands at $1.45 billion, with a negative P/E ratio, reflecting the company's current lack of profitability. The stock has experienced a strong return over the last month with a 13.93% increase, and an even more impressive 34.3% uptick over the last six months, signaling investor optimism that may be tied to the recent drug approval and launch prospects.
For those seeking more in-depth analysis and additional InvestingPro Tips, such as the company's weak gross profit margins and the fact that its stock price often moves in the opposite direction of the market, Day One Biopharmaceuticals' profile on InvestingPro offers a comprehensive view. Subscribers can use the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With 9 additional InvestingPro Tips available, investors can gain a more nuanced understanding of Day One's potential trajectory in the biopharmaceutical industry.
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