MOR - Xencor a buy at BofA on protein therapeutics

2023-05-19 11:27:29 ET

BofA Securities has initiated Xencor ( NASDAQ: XNCR ) with a buy highlighting its pipeline of protein therapeutics for cancer and inflammatory diseases.

The firm has a $42 price target (~61% upside based on Thursday's close) in Friday morning trading.

Analyst Alec Stranahan said that the company's assets, long intellectual property runway, and proprietary XmAb platform "should unlock additional value for shares as the company steps through data catalysts over the next 12-18 months."

He also praised Xencor's ( XNCR ) out-licensing strategy as the "best way to maximize value of its platform given relatively low opportunity cost while allowing for retained economics in the company’s more high-conviction assets"

Out-licensed products marketed by other companies include Alexion Pharmaceuticals' ( ALXN ) Ultomiris (ravulizumab) and MorphoSys ( MOR )/Incyte's ( INCY ) Monjuvi (tafasitamab). Xencor has eight other out-licensed or partnered programs in various stages of development.

The company's lead candidate, vudalimab, is in phase 2 for prostate cancer and advanced gynecologic and genitourinary malignancies. It has seven other candidates in phase 1.

Xencor notes that its technology can "improve therapeutic antibody performance by enhancing immune regulation, cytotoxic potency, or circulating half-life or by creating bispecific antibody structures that are stable, long-acting and readily produced."

Stranahan noted that the potential success of future out-licensing/partnerships and its own pipeline assets are not reflected in the stock's current price.

More on Xencor

Xencor: Capital-Efficient Platform Tech Play With A Lot Going On

Xencor GAAP EPS of -$1.02 misses by $0.36, revenue of $18.96M misses by $7.93M

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