ERAS - Erasca gains as Mizhuho launches with Buy on upcoming data cash runway

2023-03-30 09:03:39 ET

Cancer-focused biotech Erasca ( NASDAQ: ERAS ) extended gains in the pre-market Thursday after Mizhuho Securities initiated its coverage with a Buy rating and a $9 per share target, citing its upcoming data readouts and liquidity position.

“We like the big pipeline of targeted drug candidates that can participate in the multi-billion market of precision drugs, and the willingness to acquire novel candidates such as the recent deal to add naporafenib to the pipeline,” the analyst Mara Goldstein wrote.

In 2022, Erasca ( ERAS ) licensed RAF inhibitor naporafenib from Novartis ( NVS ) ( OTCPK:NVSEF ) by paying $20M upfront cash in addition to common stock at $6.50 per share.

“The shares have struggled this year as the dilution from the naporafenib deal is being absorbed,” the analyst argued, citing the company’s cash runway and data readouts scheduled for this year and next as some of her reasons for his bullish view.

She highlights an upcoming AACR presentation the company plans to conduct on preliminary dose escalation data for the oral SHP2 inhibitor ERAS-601 in combination with EGFR inhibitor cetuximab in solid tumors.

On the liquidity front, Goldstein notes that the company’s year-end cash position of $436M “is expected to provide a runway into 2H25, well through key data readouts and trial initiations.”

Read: Seeking Alpha contributor Alberto Abaterusso argues with a Buy rating on ERAS that investors have yet to take note of some potential catalysts that could help the company’s share price “rally very strongly.”

For further details see: