Analyst Trims NextCure Price Target Following SITC Presentation, Still Sees Big Upside

NextCure Inc NXTC shares are settling down after the volatile run in the past few sessions. With the Society for Immunotherapy of Cancer presentation and the third-quarter earnings now past, an analyst at Bank of America reviewed the events but deemed it fit to hold on to his bullish bias.

The Analyst

Alec Stranahan reiterated an Overweight rating price on NextCure and reduced the price target from $92 to $89. (See his track record here)

The Thesis

With the large unmet need for new immunotherapy approaches for cancer, the unique mechanism of action of NextCure's NC318 and NC410 is attractive, Stranahan said in a note. Both these assets are in early stages of development.

Delving on the third-quarter results, the analyst said there weren't big surprises in the print, with opex increasing slightly from the previous quarter, and cash, cash equivalents and marketable securities at $184.1 million.

The company expects its cash reserves to be adequate to fund operations into the first half of 2022, Stranahan noted. However, with the company's cash burn rate, it may have to raise additional capital by the end of 2021.

Reviewing the SITC presentation, the analyst views the totality of the data presented as incrementally positive to the NC318 program, especially as the partial response was in a new patient at the 400mg dose and immune-related adverse events were present across several patients.

Additionally, the fact that multiple patients with stable diseases are still stable even beyond six months is a net benefit over what is typically seen with salvage chemotherapy.

BofA also said its view of NC318 monotherapy activity is not impacted by concerns that the non-small cell lung cancer patient treated at 8mg dose, who attained complete response, had small baseline tumor size.

Price Action

NextCure shares traded down 5.8% to $36.80 at last check, after plunging 53% Monday in reaction to the SITC presentation.