Has Olema Stock Hit Bottom? JPMorgan Sees a Silver Lining

·2 min read

The markets nosedived on Tuesday, spooked by the twin specter of the Omicron variant and the Fed’s admission inflation issues are more than “transitory.”

Stocks bled across the board but hardly any quite as profusely as Olema Pharmaceuticals (OLMA) shares, although the drop had little to do with macro developments.

The stock took a 60% plunge into the red following an update from a clinical trial, with further confusion added over a planned poster presentation for which the company had to deny false information being spread on social media.

The data released pertained to the Phase1/2 trial of OP-1250; the company is testing the dosage for heavily pretreated, advanced ER+ /HER- breast cancer patients.

The results showed three partial responses (2 confirmed, 1 confirmed) and also a target lesion reduction of up to 100%. There was also a 17% overall response rate (ORR) based on a RP2D (dose) range between 60-120mg QD.

Investors might have shown their disapproval, but J.P. Morgan’s Anupam Rama is pleased with the study’s outcome.

“We view today’s downside as unwarranted given the totality of the data and the emerging clinical profile at the RP2D dose ranges for OP-1250,” the analyst said. “Indeed, at the RP2D dose ranges 2 confirmed responses were observed (hitting our win scenario), and the safety profile is cleaner than the total population from the phase 1/2. In our view, the rationale dose selection moving forward to next clinical trials is clear and achieves the primary goal of this early study.”

While it is still early days and bigger studies with additional data will ultimately determine whether the treatment works, Rama believes the “emerging clinical profile of OP-1250 at the RP2D has the potential to emerge as differentiated within the class.”

With the shares now trading just “marginally higher” than the value of the company’s cash position, Rama smells opportunity. In fact, the analyst’s $47 price target suggests shares will climb by a whopping 437% over the next 12 months. (To watch Rama’s track record, click here)

While OLMA stock only has one other analyst currently tracking its progress, their outlook is even more bullish than Rama’s. As such, the $51 average target implies upside of 483%. Based on the 2 Buys on file, the stock has a Moderate Buy consensus rating. (See Olema stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.