Setback For Theseus Pharmaceuticals: Analysts Cut Price Targets But Remain Bullish On Stock

Theseus Pharmaceuticals Inc THRX shares nose-dived after the company announced discontinuing enrollment in the ongoing phase 1/2 study and terminating the development of THE-630 in patients with gastrointestinal stromal tumors (GIST) after reporting dose-limiting toxicities.

Cantor Fitzgerald says the announcement is a clear disappointment. The analyst maintains the Overweight rating with a price target of $7, down $23 (after removing THE-630 from the model), as the analyst is still optimistic about the platform. 

THRX shares are trading at roughly 0.5x cash, thus no longer reflecting any credit to the platform, so this level of weakness represents a buying opportunity.

Needham downgraded the stock from Buy to Hold with no price target versus $23 earlier.

The company is analyzing data to inform the feasibility of developing low-dose THE-630 for KIT-associated mast cell-driven inflammatory indications.

The analyst notes that the management indicated that this program has been in the works for some time (rather than as a response or specific backup to THE-630).

While the ASCO update on THE-630 provided some validation on the efficacy translation of the PRA, the analyst says safety translation will be the key question. Meanwhile, clinical data is unlikely to come before 2025.

Wedbush cut its price target to $7, down from $24, with an Outperform rating. The analyst writes that THRX shares present an appealing risk/reward proposition, particularly for long-term investors, given the development of a potential top-tier EGFR inhibitor and that the shares are currently trading at a value less than cash on hand.

HC Wainwright lowered the price target from $22 to $9 with a Buy rating.

The analyst mentions that Theseus plans to use insights from THE-630 to nominate a new KITi for GIST patients. This move could extend the development timelines by as much as three years, pushing a potential approval date past 2027.

Price Action: THRX shares are down 71.6% at $2.70 on the last check Friday.