Dundee moves OncoGenex to “buy”

Noting that OncoGenex (NASDAQ:OGXI) is trading at a substantial discount to comparable Phase 2 and 3 oncology companies, Dundee Securities upgraded the stock to “buy, speculative risk” from “neutral,” but maintained its 12-month price target of $25.40 (U.S.).  The stock finished at $20.38 on Thursday.

Analyst David Martin writes that the stock remains below levels prior to the late December license agreement with Teva, and “we believe investors wanting to sell on that news are likely out of the stock by now.”

Pointing to the mechanism of clusterin as a novel cancer target, he figures “results from multiple Phase 2 trials for OGX-011 have been strong.”

Mr. Martin also notes that OncoGenex has numerous trials starting up, including a second-line prostate cancer Phase 3 with about 300 patients in the second quarter this year and a first-line prostate cancer Phase 3 expected to start in the third quarter this year, enrolling 800 patients to evaluate overall survival.  A lung cancer trial is due to start in early 2011.