Rain Oncology's Phase 3 Data Casts Doubt On Other Trials: Analyst Reevaluate Their Views

Zinger Key Points
  • Rain Oncology has decided to stop pursuing milademetan in DDLPS, one analyst said.
  • The company does not have any other pipeline value drivers, another analyst added.

Shares of Rain Oncology Inc RAIN recovered in early trading on Tuesday, after having plummeted on disappointing cancer study data.

Here are some key analyst takeaways from the company’s decision to halt studies for its lead candidate as a treatment for dedifferentiated (DD) liposarcoma (LPS).

Oppenheimer On Rain Oncology

Analyst Jeff Jones downgraded the rating from Outperform to Perform.

While the topline results from the Phase 3 MANTRA study of milademetan in DDLPS “showed drug activity with a numeric improvement in PFS vs. trabectedin (3.6M vs. 2.2M), the result was not statistically significant,” Jones said in a note. He added that the study did not even meet the "clinically meaningful" bar “set on our recent expert call.”

After the decision to not pursue milademetan in DDLPS, management has yet to provide guidance on other indications and studies, the analyst stated. “We anticipate that RAIN will continue the ongoing MANTRA-2 study in MDM2 amplified tumors in a manner that minimizes spend, while not moving ahead with the planned MANTRA 4 study in CDKN2A amplified tumors,” he wrote.

Guggenheim Securities On Rain Oncology

Analyst Michael Schmidt downgraded the rating from Buy to Neutral and removed the price target.

“We think this negative outcome is a disappointing surprise, given the previously published positive Phase I clinical data on milademetan's potential in LPS when dosed intermittently, as well as supportive clinical data in LPS from other MDM2 inhibitors,” Schmidt wrote in a note.

“Expect negative investor read-through to other ongoing/planned opportunities for milademetan and no other pipeline value drivers,” he added.

Check out other analyst stock ratings.

H.C. Wainwright On Rain Oncology


Analyst Mitchell Kapoor downgraded the rating on the stock to Neutral.

“Since LPS harbors the highest prevalence of MDM2 amplification, and given the lack of efficacy for milademetan in the LPS tumor context, we now have less confidence in the ability for the drug to address additional tumor types,” Kapoor said.

“Overall, we await further data to bolster our conviction in the clinical impactfulness of the MDM2 inhibition mechanism, including for non-LPS solid tumors and those with CDKN2A loss,” he added.

EF Hutton On Rain Oncology

Analyst Tony Butler downgraded the rating to a Hold and the price target to $5.

“In light of these results, Rain has stopped the development of milademetan in this indication,” Butler wrote. “Additionally, Rain plans to provide detailed plans on its ongoing MANTRA-2 study and soon-to-begin MANTRA-4 study via a press release in the coming weeks,” he added.

Mizuho Securities On Rain Oncology

Analyst Graig Suvannavejh reiterated a Buy rating and price target of $17.

“In our view, the result is a devastating outcome, not only in terms of the stock and for shareholders, but also for patients with DD-LPS, and bigger picture, also for the prospects of milademetan and also RAIN overall,” Suvannavejh wrote in a note.

“RAIN was expected to initiate MANTRA-4 in mid-2023 to evaluate milademetan in combination with a checkpoint inhibitor in patients with CDKN2A-loss/p53 wild-type advanced solid tumors,” the analyst said. “Post negative MANTRA data, the future of both trials are now in question,” he added.

RAIN Price Action: Shares of Rain Oncology were down 1.64% to $1.20 at the time of publishing Tuesday, according to Benzinga Pro.

Photo: Shutterstock

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Posted In: Analyst ColorPenny StocksDowngradesPrice TargetReiterationAnalyst RatingsEF HuttonExpert IdeasGraig SuvannavejhGuggenheim SecuritiesH.C. WainwrightJeff JonesMichael SchmidtMitchell KapoorMizuho SecuritiesOppenheimerTony Butler
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