Josh Nathan-Kazis

Shares of the biotech Nuvalent were up sharply early Monday, after the company unveiled updates on two experimental cancer medicines over the weekend. Analysts say each could be the best in their category.

In one trial, Nuvalent said 44% of patients with a form of lung cancer who received the company's drug zidesamtinib responded to the medicine. In the other trial, also in lung cancer patients, 38% responded to a drug called NVL-655.

Both trials involved patients whose cancers had failed to respond to a number of other treatments.

The company also said that both trials will be done next year, much sooner than expected.

The stock was up more than 20% before the market opened on Monday. Nuvalent said on Monday said it would raise money on the bump, announcing a public offering of $350 million of stock. Shares still held on to a 14.3% gain as the market opened.

Nuvalent, which went public in 2021, laid out the new results at a major annual cancer conference currently being held in Barcelona, called the European Society for Medical Oncology Congress.

The results were a highlight of the weekend for investors, which saw presentations by a long list of pharmaceutical companies and biotechs.

The updates line up a number of potentially stock-moving events for Nuvalent next year, including final results from both of the trials. Nuvalent also announced plans for a trial of NVL-655 in patients who are not heavily pretreated.

"Even if the company chooses to raise capital to support the planned [first-line] trial or starts the [first-line] trial prior to a larger transaction, we think the stock would rebound and would buy on weakness given the expedited catalyst pathway," Leerink Partners analyst Andrew Berens wrote in a note out Sunday, before Nuvalent announced its Monday public offering.

Berens wrote that the data out over the weekend support a "best-in-class profile" for NVL-655. "These results bode well for NVL-655 as it moves earlier in the treatment paradigm," he wrote.

NVL-655 is a tyrosine kinase inhibitor, a type of cancer medicine that seeks to block the growth of cancer cells. It is designed to treat tumors created through the malfunctioning of a gene called ALK, which is often the culprit in non-small cell lung cancer, and to avoid the side effects of drawbacks of earlier medicines that sought to do the same.

Zidesamtinib, for its part, is designed to treat tumors caused by ROS1, a gene at fault in a small number of non-small cell lung cancer cases.

"We think NUVL is well on its way to unlocking the multibillion-dollar potential of '655 as well as the several hundred million dollar potential of zidesamtinib," Piper Sandler analyst Christopher Raymond wrote in a Sunday note.

FactSet consensus estimates have NVL-655 sales hitting $406 million in 2029, though those could change following the weekend's updates.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

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September 16, 2024 11:18 ET (15:18 GMT)

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