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Loxo Oncology's price target raised by Wall Street analysts due to rosy LOXO 292 Phase 1 results

Last updated: 04:15 05 Jun 2018 AEST, First published: 03:54 05 Jun 2018 AEST

Cancer cells
One analyst forecasts LOXO 292 could launch commercially in 2021

Wall Street analysts rushed to raise their price targets on Loxo Oncology (NASDAQ: LOXO), after the cancer specialist announced promising phase 1 clinical results for its experimental drug LOXO 292, a selective RET inhibitor.

Indeed, the freshest data available suggests LOXO 292 performs far better in people suffering from a mutation of the RET gene than previous data suggests.

When evaluated in patients suffering from so-called RET fusion-positive cancers, LOXO 292 shrank tumors in 77% per cent of the people participating in the study. This represents a far better result than the 69% response rate across a similar population recorded last month.

Patients with lung cancer, pancreatic cancer and thyroid cancer, which had their RET mutations in common, took part in the study.

Wall Street bullish on results

In response to the news, Stephen Willey, a Stifel analyst, raised Loxo’s price target to US$225 while Matthew Harrison of Morgan Stanley capped his target at US$215 with an Overweight rating, arguing that Loxo’s new data "sets a high bar for competitors".

“The data released at the American Society of Clinical Oncology meeting … were meaningfully better than those last reported,” wrote Leah Rush Cann, a research analyst with Oppenheimer, who has an Outperform rating on Loxo’s stock.

Rush Cann forecasts that LOXO 292 could launch commercially in 2021, with estimated sales of US$394.6mn to start.

The latest data for LOXO 292 was presented at the American Society of Clinical Oncology's annual meeting over the weekend.

Loxo's shares were flat at US$186.30 in afternoon trade today.

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