Janux Therapeutics experienced a dramatic 41% decline in its stock price after unveiling early data from a Phase 1 clinical trial for JANX007, its treatment aimed at metastatic castration-resistant prostate cancer. The company described the results as “positive,” but investors reacted negatively.
The trial data indicated that 30% of patients exhibited partial responses, with a progression-free survival range of 7.9 to 8.9 months. Despite the company noting a “manageable” safety profile, Wall Street analysts expressed skepticism.
Analysts swiftly revised their price targets for JANX, reducing them by 20% to 36%. Stifel analyst Stephan Willey lowered his target to $38 from $46, citing the limited amount of new patient data over the past year and lingering questions regarding dosing strategies and the timeline for Phase 3 trials.
Meanwhile, H.C. Wainwright analyst Swayampakula Ramakanth cut his target from $70 to $45, labeling the trial results as “mixed.” He noted that the overall efficacy profile had weakened on key endpoints. Clear Street analyst Kaveri Pohlman maintained a Buy rating but slashed her target significantly from $80 to $32, reflecting a more conservative outlook.
The selloff is a stark contrast to nearly a year ago when Janux”s shares soared following promising earlier Phase 1 data, where all trial participants achieved at least a 50% reduction in prostate-specific antigen levels.
Compounding these issues is the competition from Novartis“s Pluvicto, which has received approval and demonstrated a 49% overall response rate, along with a median progression-free survival of 11.6 months. Investors are anxious about how Janux plans to position itself against this established competitor.
Willey remarked that the substantial drop in stock price seems excessive given the strength of Janux”s platform. Nonetheless, he acknowledged that heightened execution risk related to JANX007 contributed to the downward adjustment of his price target.
Despite the recent turmoil, Wall Street analysts maintain a Strong Buy consensus on Janux, with 14 analysts recommending a purchase and only one holding. The average price target is currently set at $75.42, indicating a potential upside of 122% from present levels.
Looking ahead, the company must provide more comprehensive patient data and clarify its development strategy to alleviate investor concerns. Key issues include detailing dosing protocols, trial timelines, and how they intend to compete against Pluvicto.
