IDEAYA Biosciences Inc. (IDYA:NASDAQ) investigative compound, GSK101 (IDE705), was greenlighted by the U.S. Food and Drug Administration for clinical testing, reported Wedbush analyst Dr. Robert Driscoll in an August 21 research note. Upon clearance of the investigational new drug application, Ideaya received a US$7 million (US$7M) milestone payment from its collaboration partner, GlaxoSmithKline (GSK).
"We continue to believe GSK101 is a compelling program with clear clinical paths that could provide significant upside to our Ideaya estimates," Driscoll wrote.
Offers Attractive Return
As such, Wedbush maintained its US$40 per share 12-month price target on the California-based precision medicine oncology biopharma, currently trading at about US$26.92 per share.
The return to target from the current share price indicates a compelling return for investors of 49%.
Ideaya is rated Outperform.
First Clinical Trial
Next for GSK101 is the evaluation via a Phase 1/2 trial in combination with the PARP (poly-ADP ribose polymerases) inhibitor, niraparib (Zejula), in solid tumors with homologous recombination deficiency, Driscoll reported.
These tumors include BRCA1/2-mutated tumors, of which ovarian cancers comprise about 50% and breast cancers comprise 10−14%.
Wedbush expects that GSK, responsible for the clinical development of GSK101, will launch this initial trial in Q4/23.
When the Phase 1 dose expansion starts, noted Driscoll, Ideaya is due to receive another milestone payment from GSK, this one for US$10M.
Synergy With PARP Inhibitors
GSK101 is a small molecule inhibitor of polymerase theta, a high-interest target due to its critical role in repairing DNA. The drug specifically targets the ATPase domain of polymerase theta.
Driscoll pointed out that polymerase theta inhibitors, in general, have been shown to "play nice" or "be synergistic" with PARP inhibitors and "eliminate a subset of PARP inhibitor-resistant tumors." Specifically, in one example, Ideaya demonstrated in preclinical studies that GSK101 strongly synergizes with niraparib in vivo and may overcome or prevent resistance to PARP inhibitors. This bodes well for GSK101 in its first clinical trial.
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Disclosures for Wedbush, IDEAYA Biosciences Inc., August 21, 2023
Analyst Certification We, Robert Driscoll, Sam Ravina, Ritika Das and Martin Fan, certify that the views expressed in this report accurately reflect our personal opinions and that we have not and will not, directly or indirectly, receive compensation or other payments in connection with our specific recommendations or views contained in this report.
The Distribution of Ratings is required by FINRA rules; however, WS' stock ratings of Outperform, Neutral, and Underperform most closely conform to Buy, Hold, and Sell, respectively. Please note, however, the definitions are not the same as WS' stock ratings are on a relative basis. The analysts responsible for preparing research reports do not receive compensation based on specific investment banking activity. The analysts receive compensation that is based upon various factors including WS' total revenues, a portion of which are generated by WS' investment banking activities. Company Specific Disclosures
1. WS makes a market in the securities of Ideaya Biosciences, Inc..
3. WS co-managed a public offering of securities for Ideaya Biosciences, Inc. within the last 12 months.
5. WS provided Ideaya Biosciences, Inc. with investment banking services within the last 12 months.
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