Stifel ups eFFECTOR to buy; PT to $7 on revaluating breast cancer


Stifel upgraded eFFECTOR Therapeutics (NASDAQ:EFTR) to “buy” from “hold” and raised its price target to $7 from $1.30, saying the “zotatifin combo is emerging as an active and underappreciated asset in breast cancer.” The stock closed at 53 cents on May 25.

Analyst Benjamin Burnett, Ph.D., writes that the upgrade reflects a “bullish zotatifin thesis” following new data disclosed in conjunction with ASCO 2023.

“We believe the mid-20’s percent objective response rate … implies that zotatifin is driving a material efficacy advantage over and above the underlying fulvestrant plus abemaciclib backbone, and we’re therefore increasing our probability-of-success to 40%, from 20%, while also increasing our market utilization forecasts.”

Dr. Burnett said early results presented in January pointed to a mid-to-high 20’s percent objective response rate in highly refractive breast cancer patients, which “we thought was interesting but the small sample size of seven patients kept us on the sidelines.”

However, he said the new update, with 19 efficacy evaluable patients, corroborates those early signals and increases his conviction in zotatifin and the breast cancer program.

At the stock’s current valuation, “we think zotatifin alone can drive share outperformance, and thus recommend owning into future zotatifin readouts later this year,” Dr. Burnett said.