Stifel cuts IDEAYA to hold on skepticism of MAT2A cancer program

Stifel downgraded IDEAYA Biosciences (NASDAQ:IDYA) to “hold” from “buy” and reduced its price target to $13 from $16 “on the belief that it’s difficult to gain high conviction in the MTAP/MAT2A thesis (we ascribe a probability-of-success of 20%), and that GSK’s decision not to opt-in for further development as a collaboration partner is likely to generate more skepticism around the program.”

Shares of IDEAYA have slumped $5.40 to $10.25 after the opening on Aug. 15.

IDEAYA is a clinical-stage targeted oncology company leveraging synthetic lethality and direct targeting to find new therapeutic approaches in cancer. Its most advanced program in synthetic lethality is IDE397, which aims at exploiting metabolic differences between healthy tissue and MTAP- deleted tumors.

“We expect the shares to be range bound for the near-term,” writes analyst Benjamin Burnett, Ph.D.
“We do expect clarity on the darovasertib/IDE197 program (and initial Kimmtrak sales bode well for adoption), but we think our positive view here is undifferentiated from consensus.,” he said.

Dr. Burnett said that for IDE397, a MAT2A inhibitor, “our thesis has mainly revolved around monotherapy pursuits, and our skepticism has been further compounded with GSK walking away from the program. We think the best path forward for this program is as a combination regimen and look to revisit our thesis as these pursuits progress.”