2023-06-23 21:00:44 ET
Barclays says it has chosen Biomea Fusion ( NASDAQ: BMEA ), Replimune ( NASDAQ: REPL ), Syndax Pharmaceuticals ( NASDAQ: SNDX ) and Iovance Biotherapeutics ( NASDAQ: IOVA ) as its top picks in the small and mid-cap oncology space for the second half of the year.
The investment bank said it made the picks based on cash runway, near-term catalysts and how disruptive the companies' therapies would be to the sector.
Barclays said Biomea made the list largely because of the expected upcoming release of updated Phase 2 data for its drug BMF-219 in the treatment of type 2 diabetes. The bank estimates there is a 70% chance of the biotech reporting positive data, with positive data potentially lifting shares by $10 and negative data pushing them down as much as $20.
Biomea is scheduled to present the data at the American Diabetes Association meeting, which is being held this weekend, June 23 to 26. According to a Biomea release, the company plans to unveil a poster presentation with the data on Friday evening, followed by a presentation midday Saturday.
Barclays said the company is also expected to report Phase 1 data on the drug in the treatment of acute myeloid leukemia, or AML, during the latter half of the year, possibly as early as July. Barclays estimates Biomea has a cash runway into 2025.
Replimune, meanwhile, is slated to release registrational data for its therapy RP1 in CSCC, or cutaneous squamous cell carcinoma, in Q3 and in PD-1 refractory melanoma in Q4. Barclays sees a 75% chance of the company reporting positive data for the melanoma indication, which it believes could boost shares by more than 20%.
The bank sees RP1 generating peak probability adjusted sales of around $530M by 2030 for CSCC, accounting for $17 of its $50 price target for the stock. The company has a cash runway into the second half of 2025.
Barclays also views Syndax Pharmaceuticals ( SNDX ) as attractive, with upcoming catalysts such as Phase 1 data for its drug revumenib in the treatment of AML due by year's end and initial pivotal Phase 2 data for AML expected in Q3. Syndax has a cash runway into the latter half of 2025, it added.
Iovance ( IOVA ) was the bank's final pick for the list, with Barclays liking the risk/reward for the stock ahead of a potential FDA approval and launch of its drug lifileucel for melanoma. The FDA is expected to make a decision on whether to approve the product by Nov. 25. The company has a cash runway into the second half of 2024.
"While valuation is levered to one product, we are encouraged by the data presented to date, positive KOL feedback and potential expansion opportunities within and outside melanoma," Barclays added.
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Barclays bullish on Biomea, Replimune, Syndax, Iovance for 2H 2023