Analysts Move To Sidelines For Cancer Player Kinnate Biopharma After Restructuring

Monday, Kinnate Biopharma Inc KNTE prioritized the exarafenib combination, KIN-8741, and discovery efforts around its CDK4 selective program. 

Kinnate also implemented a corporate restructuring by reducing the company's workforce by approximately 70%. It expects to have 28 remaining full-time employees. 

Piper Sandler downgraded the stock from Overweight to Neutral with a price target of $4, down from $20.

Analysts Christopher Raymond, Allison Bratzel, and Nicole Gabreski note that the updated price target suggests potential gains compared to the current stock price, but they are opting to step back from this investment. 

This decision is based on the outcomes of assets developed through KNTE's discovery engine thus far, coupled with the observation of a lack of significant short-term clinical catalysts.

Wedbush writes that while the updated combination data showed encouraging activity in NRASm melanoma patients, the market opportunity is small, and development will take some time. 

The analysts also see low odds of study success for single-agent c-MET inhibitors, and with c-MET combinations likely to increase costs and push out approval timing, they are moving to the sidelines regarding KNTE shares.

Wedbush cut the price target from $14 to $2, downgrading to a Neutral rating from an Outperform.

William Blair says that despite facing setbacks in developing its lead assets, the company holds a promising platform for small-molecule kinase inhibitors in precision oncology. 

Although there is some uncertainty due to recent restructuring, their pipeline has hidden value, and upcoming positive catalysts could lead to substantial stock price growth. The analyst maintains an Outperform rating.

Price Action: KNTE shares are down 14.4% at $1.4550 on the last check Tuesday.