It isn't difficult for a modestly priced stock to leap in value on a positive news item. That's the dynamic behind the monster rise these past few days of clinical-stage biotech CytomX Therapeutics (CTMX 7.37%).
An analyst initiated coverage of the cancer-focused drug developer, and since then its shares have been off to the races. According to data compiled by S&P Global Market Intelligence, CytomX's stock was up by a hard-to-beat 43% week to date as of early Friday morning.
Anticipating a major price bounce
The party started before market open on Monday, when Cantor Fitzgerald's Olivia Brayer launched her CytomX coverage. She tagged it with an overweight (buy, in other words) recommendation at a price target of $6 per share. That anticipates upside of more than double the most recent closing share price, even after this week's rally.
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According to reports, Brayer zeroed in on the company's leading pipeline drug, CX-2051, which it's developing for late-stage colorectal cancer. That disease, she noted, currently lacks an effective, approved treatment. Patients who suffer from it have few options at the moment.
In contrast to several other developmental drugs, CX-2051 is being put through its paces by CytomX alone and not in partnership with any peer. Last month, the company said it aims to provide a data update on a Phase 1 study of the medication in the first calendar quarter of next year.
Big changes in the fundamentals
That revelation came several days after CytomX unveiled its second-quarter results. Despite its status as a clinical-stage company the biotech does post some revenue, although this dropped to $18.7 million in the period, from more than $25.1 million in the same frame of 2024. Operating expenses also declined considerably, however, narrowing net loss to $120,000 from the year-ago deficit of over $6.5 million.
