WB starts Pyxis Oncology at OP; $30 fair value estimate

Pyxis Oncology

William Blair launched coverage of Pyxis Oncology (NASDAQ:PYXS) with an “outperform” rating and fair value estimate of $30. The stock closed at $13.30 on Nov. 1. 

Pyxis Oncology is developing next-generation antibody-drug conjugates (ADCs) and monoclonal antibodies (mAbs) for the treatment of solid and hematologic malignancies. 

The company has in-licensed key assets and technology, including Pfizer’s Flexible Antibody Conjugation Technology platform, LegoChem linker technology, and a suite of novel immuno-oncology targets from the University of Chicago that provide long-term optionality, writes analyst Raju Prasad, Ph.D. 

“Initial ADC candidates provide multiple shots on goal, each with blockbuster potential,” Dr. Prasad said, pointing to PYX-201, PYX-202 and PYX-203. Pyxis has guided to IND submissions for PYX-201 and PYX-202 in mid-2022, and PYX-203 in 2023. 

“In our view, PYX-201 and PYX-202 are de-risked by previous clinical experience using the auristatin and MMAE payloadsrespectively,” Dr. Prasad said. PYX-201 also uses the same linker-payload combination and site-specific chemistry used previously in the Phase 1 clinical study of Pfizer’s HER2-targeted ADC, PF-06804103. PYX-203 combines a clinically de-risked target in acute myeloid leukemia, CD123, with a novel DNA-damaging CPI dimer payload, he added. 

Dr. Prasad is conservatively modeling PYX-201 achieving proof-of-concept (60% probability of success) in late-line non–small-cell lung cancer and triple-negative breast cancer; PYX-202 achieving proof-of-concept (60% probability of success) in small-cell lung cancer; and PYX-203 achieving proof-of-concept (25% probability of success) in acute myeloid leukemia.

“In our view, monotherapy activity in the clinic with any of these three programs could lead to 50% to 100% upside from current levels,” he added.