SVB Leerink reduced its price target for Aduro Biotech (NASDAQ:ADRO) to $5 from $8 based on recent ADU-S100 (MIW815) Phase1b dose escalation data presentation at ASCO and re-evaluation of development assumptions in the IONIAN (Immuno-ONcology Industry ANalytics) market model. The stock closed at $1.79 on June 25.
“We are encouraged by the early responses in triple negative breast cancer (TNBC) and remain positive on STING agonists because of the depth of biological evidence and their complementarity to checkpoint inhibition through multiple mechanisms that prime the adaptive and innate immune systems,” analyst Daina Graybosch writes.
“To move forward in development, however, we believe Aduro and Novartis will need to answer several questions regarding dosing, biomarker selection, and biologic rationale for indication selection,” she added. “While we hope they can answer questions with mature Phase 1b and new Phase 2 data, Aduro and Novartis could be facing a longer path of optimization.”
To reflect this uncertainty in the IONIAN model, Ms. Graybosch narrowed her assumption for ADU-S100 + anti-PD1’s development path to TNBC and squamous cell carcinoma of the head and neck (SCCHN).
She also noted increased in-class competition in these settings, as Merck also is evaluating its STING agonist, MK-1454 in TNBC and SCCHN.
