Kura Oncology Inc. (KURA:NASDAQ) presented new preclinical data at the American Center for Cancer Research that demonstrated its new medication, Tipifarnib, is expected to perform well both individually and as a supplement to other therapies for the treatment of several types of solid tumors, including acute myeloid leukemia, noted H.C. Wainwright & Co. analyst, Joseph Pantginis, Ph.D., in an April 17 research note.
The company has multiple drugs in development, including its menin inhibitor, ziftomenib, into Phase 2 of the KOMET-001 trial. In these trials, patients have reported good results so far. In Phast 1a of the KoMET-001 study, "Initial Phase 1a efficacy assessment showed early anti-tumor activity in two patients achieving complete remission."
Pantginis gave Kura a Buy rating and a target price of US$32, driven by tipifarnib (71% contribution) for both HNSCC and NSCLC and ziftomenib for AML (29% contribution), but still cautions that "factors that could impede reaching our price target include failed or inconclusive clinical trials or inability of the company to secure adequate funding to progress its drugs through the development pathway."
Review of Results
Pantginis presented the key points of Kura Oncology's latest reports.
The company has multiple catalysts coming up in 2023, including plans to test its newest farnesyl transferase inhibitor (FTI), Ziftomenib, KO-2806, for treating advanced solid tumors. The company plans to initiate clinical development with a Phase 1 trial evaluating the drug's safety in Q3 of this year.
Kura's FTI portfolio is led by Tipifarnib, which is currently being evaluated in monotherapy in the Phase 2 AIM-HN trial in combination with the PI3K inhibitor, alpelisib, in the KURRENT-HN trial. The company reported promising preliminary data from the KURRENT-HN study, showing that Tipifarnib, in combination with Alpelisib, resulted in durable partial remission in a patient with a mutated version of Stage 3 squamous cell carcinoma of the tonsil.
Potential Risks
Pantginis has kept Kura rated as a lucrative Buy, stating in his latest report, "We reiterate our Buy rating and US$32 price target. Our valuation is currently driven by Tipifarnib (71% contribution) for both HNSCC and NSCLC and Ziftomenib for AML (29% contribution). Our valuation is based on our clinical net present value (NPV) model, which allows us to flex multiple assumptions affecting a drug's potential commercial profile."
While this assessment shows a strong preference, as with all investments, there is still a risk. Kura could run into inadequate funding that would shut down or slow movement in its drug trials. As these medications progress into new phases of testing, it is possible that results could be rendered inconclusive or turn negative.
Structure and Predictions
KURA's stock is listed on the NASDAQ exchange.
Pantginis' research report shares recent rating and target price information as well as current market data on the company:
- Rating: Buy
- Price: US$11.44, with a 52-week high of US$19.93 and a 52-week low of US$10.30
- Price Target: US$32.00
- Market Cap: US$783 million
Kura has 68.4 million shares outstanding, and the company's cash reserves are US$438 million. It has a current total debt of US$9.2 million.
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Disclosures for H.C. Wainwright & Co., Kura Oncology Inc., April 17, 2023
H.C. Wainwright & Co, LLC (the “Firm”) is a member of FINRA and SIPC and a registered U.S. Broker-Dealer.
I, Joseph Pantginis, Ph.D., Matthew Keller, Ph.D. and Sara Nik, Ph.D. , certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies. None of the research analysts or the research analyst’s household has a financial interest in the securities of Kura Oncology, Inc. and Syndax Pharmaceuticals, Inc. (including, without limitation, any option, right, warrant, future, long or short position). As of March 31, 2023 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Kura Oncology, Inc. and Syndax Pharmaceuticals, Inc..
Neither the research analyst nor the Firm knows or has reason to know of any other material conflict of interest at the time of publication of this research report. The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services. The firm or its affiliates received compensation from Kura Oncology, Inc. for non-investment banking services in the previous 12 months. The Firm or its affiliates did not receive compensation from Kura Oncology, Inc. and Syndax Pharmaceuticals, Inc. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report. The Firm does not make a market in Kura Oncology, Inc. and Syndax Pharmaceuticals, Inc. as of the date of this research report. The securities of the company discussed in this report may be unsuitable for investors depending on their specific investment objectives and financial position. Past performance is no guarantee of future results. This report is offered for informational purposes only, and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such would be prohibited. This research report is not intended to provide tax advice or to be used to provide tax advice to any person.
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