MRK - Mirati tumbles after study failure for cancer drug; Oppenheimer upgrades

2023-05-25 15:23:24 ET

Mirati Therapeutics ( NASDAQ: MRTX ) shed ~12% on Thursday after the biotech said its lung cancer therapy sitravatinib, in combination with Bristol-Myers Squibb's ( BMY ) Opdivo, failed to reach the primary endpoint in a Phase 3 trial.

However, Oppenheimer analyst Jay Olson upgraded the stock to Outperform from Perform, noting that without sitravatinib, the company becomes "a much cleaner story for potential M&A with an attractive valuation."

In late 2022, Mirati ( MRTX ) shares jumped amid reports that the cancer drugmaker drew potential takeover interest from large pharma companies. At the time, BMO Capital Markets projected MRTX could be worth $200 per share in a buyout deal, while JPMorgan indicated a $185-$200 per share target.

Oppenheimer's Olson, with a new price target of $56 on MRTX, cites multiple catalysts for the company's FDA-approved lung cancer therapy Krazati including its potential European approval and H2 updates from a Phase 3 trial called "Krystal-7."

Krystal-7 is designed to evaluate the KRAS G12C inhibitor in combination with Merck's ( MRK ) Keytruda as a first-line option for certain patients with non-small cell lung cancer (NSCLC).

More on Mirati

• Mirati up 4% as Krazati granted Breakthough Therapy designation for colorectal cancer
• Mirati: The High Stakes Of Krazati's Market Performance Amidst Dwindling Cash

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