Stifel initiated coverage of Compass Therapeutics (NASDAQ:CMPX) with a “buy” rating and price target of $9. The stock closed at $3.95 on Jan. 26.
“We believe the recent presentation at ASCO-GI 2023 of updated results from the Phase 2 trial evaluating the combination of CTX-009 and paclitaxel in second line biliary tract cancer increases our confidence in a clear/high-probability path to registration via the now-recruiting, randomized Phase 2/3 trial,” writes analyst Stephen Willey.
However, he said the longer-term prospect of single-agent CTX-009 in third line plus metastatic colorectal cancer “inherently commands a lower probability of success, given historical competitive DLL4-targeting (monoclonal) and DLL4/VEGF-A-targeting (bispecific) development efforts in this tumor type.”
“But [we] also believe the limited amount of monotherapy data generated to date remains directionally impressive and risk/reward ahead of preliminary Phase 2 objective response rate data likely in the second half of 2023 is attractive, given the current valuation implies no attribution of value here,” he added.
“We believe the earlier-stage pipeline of novel immunotherapy assets is similarly high-risk, but also represents an interesting source of longer-term optionality,” Mr. Willey said.