asbe
Stifel downgraded ALX Oncology (NASDAQ:ALXO) to hold, stating that it sees the company’s CD47 blocker drug evorpacept as fully valued for the de-risked HER2+ gastric cancer opportunity.
The investment bank said it would be more optimistic if it believed the market opportunity wasn’t below $100M and “prefers the sidelines until additional development plans can materialize.”
Stifel said it realizes the downgrade is ahead of a string of early-stage data catalysts, where the “optionality” of CD47 will be tested.
“However, we either see insufficient evidence to support the potential for positive data or fail to see tractable development paths as a combination backbone,” said Stifel.
“Strategic interest could solve the latter, but that thesis is not straightforward given the extreme value destruction of historic CD47 deals and the relatively high number of CD47/SIRPa assets already in pharma pipelines,” it added.
Stifel has a price target of $14 on the stock.
