Bank of America thinks Kura Oncology could be a winner in blood cancer treatment, believing the stock could nearly triple in value. The bank initiated research coverage of the clinical-stage biotech company with a buy rating and $31 per share price target. Bank of America’s forecast implies 181% upside from Thursday’s $11.04 close. Kura has a pipeline of small molecule drug candidates for the treatment of cancer, including ziftomenib, a targeted therapy in late-stage development for certain forms of acute myeloid leukemia (AML). “Given solid long-term revenue potential as ziftomenib expands into earlier treatment settings, and possibly additional leukemias, we see shares as significantly undervalued, presenting an attractive opportunity at current levels,” analyst Jason Zemansky wrote in a Friday note. “Early clinical data has been favorable, where treatment with ziftomenib monotherapy produced robust responses in a heavily pretreated patient population where outcomes are often poor.” Kura Oncology’s stock price briefly rose as much as 6.5% in early Friday trading. Kura is down 9.2% in 2023, driven by what Zemansky said are concerns over Kura’s competitive position against rival Syndax Pharma , which is also developing a therapy for patients with certain acute leukemias. The analyst maintained his favorable position on Kura, however. “We expect the market to be more shared vs. ‘winner-take all,’ with each asset carving out a niche —dynamics common in oncology and likely overlooked by many,” he said. Kura last week reported earnings per share of 53 cents in the second quarter, one cent below estimates of 54 cents from analysts polled by FactSet. R & D expenses were reported to be $28.2 million, exceeding analysts’ expectations of $26.9 million. Cash on hand rose to $477 million from $438 million at the end of December , giving the biotech enough cash to fund current operations until mid-2026, management said. KURA 1Y mountain Kura Oncology stock. Still, BofA said that beyond Kura’s targeted therapy for AML, it has the potential to become a major option in other cancer treatments, as it has a tumor program focused on farnesyl transferase inhibitors. “Altogether, given underappreciated upside from ziftomenib and downside protection from a largely overlooked solid tumor program, we see a lot to like about the Kura story—with compelling risk/reward for shares especially at current levels,” Zemansky said. — CNBC’s Michael Bloom contributed to this report.
