On Wednesday, Jefferies adjusted its stock price target for ADC Therapeutics (NYSE:ADCT), a biotechnology firm specializing in the development of antibody-drug conjugates for cancer treatment. The firm's analyst has revised the stock price target downward to $13.00 from the previous $14.00 while retaining a Buy rating on the stock.
The analyst noted that the full-year 2023 sales of Zynlonta, ADC Therapeutics' lead product, had been pre-announced in January, reaching $16.6 million. The expectation is for revenue to continue its upward trajectory in 2024.
Despite recent stock weakness attributed to higher-than-anticipated censoring in the LOTIS-5 study, the analyst believes this has no significant bearing on the development timelines or the probability of success for the drug.
The LOTIS-5 clinical trial is part of ADC Therapeutics' evaluation of Zynlonta's efficacy. The analyst's comments suggest that while there was a concern regarding the trial's censoring, it does not materially affect the company's prospects.
Looking forward, the first half of 2024 is anticipated to be pivotal for ADC Therapeutics with the initial data from the LOTIS-7 trial, which is studying bispecific antibodies (BsAbs). This upcoming data release is seen as a key near-term catalyst for the company.
In conclusion, Jefferies maintains an optimistic outlook for Zynlonta's potential, particularly in earlier lines of treatment for diffuse large B-cell lymphoma (DLBCL). This optimism is underpinning the firm's continued support for a higher valuation of ADC Therapeutics, despite the adjusted price target.
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