quantumup@Quantumup1
Jefferies reiterated $CTMX Buy/$16, and said: We spoke w/ mgmt following recent Ph1a topline to clarify several outstanding questions.
$PFE MRK RHHBY DSNKY $ABBV
Jefferies added: Varseta-M (masked EpCAM/Topo1 ADC) showed impressive results in late-line mCRC, with active dose narrowed to 8.6/ 10 mg/kg and updated dual Gl prophylaxis in dose optimization to select pivotal dose, with full package update (pivotal dose/ plan with supporting data) by YE26.
With recent financing, we see good entry point at current value and expect stock move up into YE... While we all love to see more data, we think Varseta-M has been meaningfully derisked in a few ways including the absence of EpCAM-class toxicities in an expanded ~80 patient dataset and durability holding in a difficult 4L+ mCRC population (Topline, Debates).
Narrative has shifted from "do we have a drug?" to "how can we best take on Varesta-M across the continuum of mCRC plus into other solid tumors?"
Mgmt was candid that work remains (diarrhea AE mitigation and dose fine-tuning as active workstreams), but emphasized they had converged on doses that work, had raised capital for further development, and were prioritizing execution from here.
We also note mgmt's continued effort to remain transparent and engaged w/ investors, mgmt booked back to back lately, reporting ~60+ meetings since our recent catch-up last week following topline results.
Stock drivers we see from here:
(1) incremental efficacy/ durability updates at chosen go-fwd dose;
(2) evidence that mandated dual prophylaxis improves tolerability/ deliverability w/o eroding exposure/activity;
(3) clarity on Gl toxicity mechanism/ algorithms to support pivotal design;
(4) timing and design of a pivotal path initiating likely 1H27.
