Ideaya Biosciences (IDYA) has taken investors on quite a ride this year. After the stock reached all-time highs in February, it has given it all back (plus some). Yet, the company’s strong portfolio, led by Darovasertib, demonstrates promising potential in treating metastatic uveal melanoma when combined with crizotinib. Further, another candidate from the company, IDE397, has shown encouraging interim results in MTAP-deletion cancers. The company has also recently secured an exclusive licensing agreement for a new program, SHR-4849, for which the company aims to file a US IND in early 2025.
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With a strong financial runway extending into 2028, the firm is well-positioned to push forward. The current downturn may be an excellent opportunity for investors to reconsider the shares.
Managing a Robust Pipeline
IDEAYA is an oncology-focused firm that develops targeted therapeutics for specific patient groups selected through molecular diagnostics. Integrating translational biomarker identification and validation capabilities with small molecule drug discovery aims to identify and serve the patient populations most likely to reap the benefits of its targeted treatments.
The company is making strides in several clinical programs, including treatments for tumors with GNAQ or GNA11 mutations, tumors with MTAP deletion, and tumors with homologous recombination deficiency. Collaborations with GSK (GSK) have led to programs like IDE705 and IDE275, which target tumors with HRD and MSI-High, respectively.
Further, the Independent Data Monitoring Committee has given positive recommendations regarding a potential registration-enabling Phase 2/3 trial evaluating a combination of darovasertib and crizotinib in treating first-line metastatic uveal melanoma patients. Another promising development candidate from the company, IDE892, is also anticipated to file a US IND in the first half of 2025.
IDEAYA has also recently partnered with Jiangsu Hengrui Pharmaceuticals to develop and commercialize a novel ADC program, SHR-4849. The drug targets DLL3-expressing solid tumors and has shown promising results in preclinical studies. The treatment is currently in Phase 1 clinical trials in China.
Recent Financial Results
The company recently announced Q3 financial results. R&D expenses for the quarter totaled $57.2 million, a marginal increase from the $54.5 million recorded in Q2, primarily due to heightened clinical trial expenses and outside services. Meanwhile, G&A expenses fell to $9.7 million from $10.4 million in Q2, primarily because of a decreased stock-based compensation expense.
The net loss for the quarter stood at $51.8 million, a slight improvement from the $52.8 million net loss registered in Q2. The GAAP earnings per share (EPS) of -$0.60, surpassed expectations by $0.05.
As of the end of the quarter, the company reported a sizable $1.2 billion in cash, cash equivalents, and marketable securities, reflecting a significant increase from $952.7 million at the end of Q2, mainly due to net proceeds from a public offering in July.
Negative Price Momentum But Bullish Outlook
While the stock has been on a wild ride the past year, investors holding for the past three years have seen a 6.43% increase in the share price. The stock trades near the bottom of its 52-week price range of $24.48 – $47.74 and shows ongoing negative price momentum as it trades below the major moving averages. Investors interested in the stock might want to wait for the downward momentum to turn around before establishing a position.
Despite the downturn in share price, analysts following the company remain bullish on IDYA stock. For example, Stephens recently initiated coverage of the shares with an Overweight rating and $51 price target, noting the company’s robust pipeline in development for multiple solid tumor indications.
IDEAYA Biosciences is rated a Strong Buy overall, based on the recent recommendations of 14 analysts. Their average price target for IDYA stock is $56.67, representing a 125.24% upside from current levels.
IDYA in Summary
Despite a year of fluctuation, IDEAYA presents an opportunity for investors, with its robust portfolio of candidates such as Darovasertib and IDE397 and the newly licensed SHR-4849, all displaying promising potential for various cancer treatments. The company maintains a strong financial footing, with enough cash to extend operations into 2028. Moreover, positive recommendations and bullish analyst sentiment underline the upside potential for those considering the stock.
