On Wednesday, H.C. Wainwright adjusted its outlook on Apollomics Inc. (NASDAQ: APLM), reducing the 12-month stock price target to $2 from the previous $5. The firm maintained a Buy rating on the stock despite the revision. The adjustment came in response to recently revealed Phase 3 study results which did not meet the expected benchmarks.
Earlier this week, Apollomics announced the top-line results of its Phase 3 global pivotal study. The study was designed to evaluate the effectiveness of uproleselan in combination with chemotherapy versus chemotherapy alone in treating patients with relapsed or refractory acute myeloid leukemia (R/R AML).
The combined treatment did not show a statistically significant improvement in overall survival for the intention-to-treat population. The median overall survival for patients receiving the combination treatment was 13 months, compared to 12.3 months for those receiving chemotherapy alone.
The findings have prompted reassessment of the potential success of Apollomics' ongoing Phase 3 bridging study in China. H.C. Wainwright has expressed concerns about the increased risk associated with this study, leading to a decrease in the probability of approval for uproleselan in China from 40% to 10%. This reassessment is a key factor in the decision to lower the price target for Apollomics shares.
In addition to revising the probability of approval, the firm also reduced the discount rate applied to its model from 12% to 11%, which contributed to the new stock price target. Despite these changes and the disappointing study results, H.C. Wainwright reaffirmed its Buy rating on Apollomics, indicating continued optimism for the stock's future performance.
Investors are now watching closely as Apollomics navigates the aftermath of the study results and progresses with its Phase 3 bridging study in China. The company's ability to address the challenges posed by the recent findings will be crucial for its future prospects in the competitive pharmaceutical landscape.
InvestingPro Insights
Following H.C. Wainwright's revision of Apollomics Inc.'s stock price target, a glance at the real-time data from InvestingPro reveals a challenging landscape for the company. Apollomics holds a market capitalization of $36.02 million, reflecting its position in the market.
Despite an impressive revenue growth of 154.18% in the last twelve months as of Q4 2023, this growth is juxtaposed with a significant operating income loss of $53.55 million, indicating substantial costs overshadowing revenue gains.
InvestingPro Tips highlight several concerns for investors. Apollomics is quickly burning through cash, which could pose liquidity risks. Moreover, analysts do not anticipate the company will be profitable this year, and the stock has been underperforming, trading near its 52-week low.
On the positive side, the company holds more cash than debt, providing some financial stability, and its liquid assets exceed short-term obligations, suggesting the company can manage its immediate financial liabilities.
For those interested in a deeper dive into Apollomics' financial health and future prospects, InvestingPro offers additional insights and metrics. There are 12 more InvestingPro Tips available for Apollomics, which can be accessed at: https://www.investing.com/pro/APLM. For readers looking to leverage these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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