Celcuity Shares Climb Nearly 8% as Cantor Fitzgerald Backs Breast Cancer Drug Maker Ahead of Key ESMO Data

Shares of Celcuity Inc. climbed nearly 8% on Thursday after Cantor Fitzgerald began covering the cancer drugmaker with a bullish rating, citing the growth potential of its newly launched breast cancer treatment, as investors looked ahead to fresh clinical data at a major medical conference this weekend.

Celcuity shares rose $4.79, or 7.78%, to $66.35 in early trading, giving the Minneapolis-based company a market value of about $3.3 billion.

The gain offered a lift for a stock that had fallen about half over the past six months and was down nearly 13% over the past year.

Cantor turns bullish

Cantor Fitzgerald initiated coverage of Celcuity with an overweight rating and a 12-month price target of $140 per share, more than double the stock's current price.

The firm said it views Celcuity as one of the few commercial-stage cancer companies with a credible path to multibillion-dollar peak sales, describing the company as offering an attractive growth story driven by its product launch, with additional strategic options.

Cantor joins a group of analysts who are bullish on the stock. TD Cowen recently raised its price target to $145 with a buy rating, while JPMorgan initiated coverage at overweight with a $157 target. Guggenheim raised its target to $175, and Citizens has a target of $177. Analysts' price targets range from $130 to $177.

A newly launched drug

Celcuity has launched its first product, Revtorpyk, also known as gedatolisib, for patients with a common form of advanced breast cancer known as HR-positive, HER2-negative breast cancer, in patients who have already received one line of treatment.

The drug works by blocking several proteins in the PI3K/mTOR pathway, which helps cancer cells grow and survive. The initial approval covers patients whose tumors do not carry mutations in the PIK3CA gene, which represent roughly 60% of patients in that group.

Celcuity expects to seek expansion of the drug's use to patients with PIK3CA mutations next year, which would cover the full population of patients receiving second-line treatment.

The company has set a wholesale price of $10,000 per vial. The National Comprehensive Cancer Network, an influential group that sets cancer treatment guidelines, has recognized Revtorpyk-based regimens as preferred options for certain patients, a designation that can help drive adoption by doctors.

Key data ahead

Investors are also focused on the upcoming European Society for Medical Oncology Congress, one of the world's most important cancer conferences, which takes place Oct. 23 to 27 in Madrid.

Celcuity is set to present updated results from its Phase 3 VIKTORIA-1 trial, testing gedatolisib in combination with other treatments for advanced breast cancer, in a late-breaking oral presentation on Saturday. The company will also present posters on gedatolisib in prostate cancer, a comparison of the drug with other treatments and details of its VIKTORIA-2 trial.

Data presented at major medical conferences can significantly affect biotech stocks, as investors gauge how a drug compares with competing treatments.

Why the stock had fallen

Despite analysts' optimism, Celcuity's stock had come under pressure in recent months, falling about 50% over six months. Biotech stocks often struggle during the early stages of a product launch, as investors wait for evidence that sales will meet expectations.

Some analyses, including one from InvestingPro, have suggested the stock may be overvalued relative to its estimated fair value, reflecting the uncertainty that surrounds early-stage drug launches.

What's next

The VIKTORIA-1 data at ESMO this weekend will be a key event for the company. Investors will also watch early sales figures for Revtorpyk to gauge the strength of the launch, as well as progress toward expanding the drug's approval to patients with PIK3CA mutations.

For now, the backing from Cantor Fitzgerald and other analysts suggests that many on Wall Street see significant upside if Celcuity's launch succeeds.