Relay well-positioned to generate significant value with RLY-2608, says Stifel

Stifel notes after having hosted an investor cocktail reception Sunday evening with CEO Sanjiv Patel, President R&D Don Bergstrom, and CDO Pete Rahmer that Relay Therapeutics management believe they have delivered a RLY-2608 Phase 1b data package that “instills confidence to initiate a phase 3 trial against capivasertib.” Exiting the ESMO meeting, the firm thinks Relay is “well-positioned to generate significant value with RLY-2608” and expects shares to work after last week’s weakness attributed to the financing and a competitive overhang. The bear thesis that Relay will be quickly out-innovated after a costly pivotal development “appears less likely to hold,” argues the analyst, who thinks the Street will begin to recognize and value the significant 18-month competitive lead established by Relay for second-line breast cancer, the strong balance sheet, and optionality from RLY-2608 triplet dose-escalation development and expansion. Following the ESMO presentations and meetings, the firm reiterates a Buy rating and $28 price target on Relay shares.