Genuine Monotherapy Approach In EGFRm NSCLC: Analyst Upgrades Switches To Buy On Black Diamond Therapeutics

Tuesday, Black Diamond Therapeutics Inc BDTX announced initial clinical data from the dose escalation portion of Phase 1 clinical study of BDTX-1535 for non-small cell lung cancer (NSCLC) and glioblastoma multiforme (GBM). 

The new data from the dose escalation portion of the Phase 1 study demonstrated clinical proof of the activity of BDTX-1535 in NSCLC patients harboring both acquired resistance and intrinsic driver EGFR mutations.

Stifel analyst upgraded the stock from Hold to Buy with a price target of $10, up from $2.

The analyst notes that compared to other developments that have modest monotherapy efficacy in 2L post-Tagrisso, and are forced into combinations or lengthy randomized trials, the BDTX-1535 effect size may potentially allow for rapid monotherapy regulatory paths. 

It also says the biggest catalyst is the ORR of the dose expansion cohorts in EGFRm NSCLC, and whether it suggests a pre-chemo Accelerated Approval pathway is possible (likely needs 50-60% ORR) or if the regulatory path will become more complicated with the requirement to combine or randomize. 

BDTX can also counter the usual "small commercial market" targeted oncology bear narrative with parallel development in two separate addressable populations where BDTX-1535 is active. 

For the currently defined opportunities, the analyst models around ~5,000 US addressable patients (versus the 6,400 management estimate).

The original concern about the response durability persists. But the analyst says the company appears funded into 2024 dose expansion data to provide such an answer. 

The company raised $75 million via equity capital raise.

Price Action: BDTX shares are down 1.62% at $4.95 on the last check Friday.