Ideaya Biosciences: Advancing Pipeline, Further Evidence Needed For Immediate Entry

Christoph Burgstedt

Investment Thesis Summary

As the caller twelvemonth is bestowed upon us, we are backmost to present our readers the undercovered opportunities swimming astir the healthcare, biotech and med-tech pools. There's been a fig of advancements successful the oncology abstraction of late, with adjacent progress made wrong the melanoma and coagulated tumours. We've maintained our vulnerability to names focusing connected melanoma treatment[s] into FY23', holding an allocation to Immunocore Holdings (IMCR), and remaining constructive connected DermTech, Inc. (DMTK) astatine the aforesaid time. We promote investors to work some publications [DermTech click here; Immunocore click here]

As we look to diversify wide vulnerability to the segment, we returned to our investigation connected IDEAYA Biosciences, Inc. (NASDAQ:IDYA) aft caller wins with the FDA connected its investigational drug, darovasertib. The marketplace was formerly constructive connected IDYA successful precocious September FY22', sending the banal backmost supra its erstwhile highs earlier pushing into a sideways consolidation for the past 10-weeks [Exhibit 1]. Shares present commercialized backmost beneath the 50DMA, and truthful the question present turns to whether there's much upside to beryllium expected.

Exhibit 1. IDYA pushing backmost supra erstwhile highs successful FY22' earlier trading sideways for the past 10-weeks

Data: Updata

IDYA caller developments

First off, it's important to enactment the FDA granted accelerated way designation to IDYA's darovasertib programme arsenic a operation therapy with Pfizer's (PFE) crizotinib [brand sanction Xalkori, an investigational c-MET inhibitor], investigating the attraction successful patients with metastatic uveal melanoma ("MUM"). The accelerated way designation allows for expedited reappraisal process with imaginable for a much speedy FDA approval, via precedence reappraisal of immoderate caller cause exertion ("NDA").

Interim results from the phase 1/2 multi-center, open-label handbasket trial [trial identifier: NCT03947385] evaluating the darovasertib and crizotinib operation showed promising objective efficacy successful patients with MUM. Of the patients with first-line MUM [n=8], 4 had confirmed partial responses, resulting successful an wide effect complaint ("ORR") of 50%. Among the evaluable patients with any-line MUM [n=35], 11 had confirmed partial responses, yielding an ORR of 31%. Tumor shrinkage was observed successful 89% of the patients with any-line MUM [n=31], with median progression-free endurance complaint of 5 months.

The remaining portions of the survey are presently underway. It aims to measure the information and efficacy illustration of darovasertib successful patients with coagulated tumours harbouring either GNAQ and/or GNA11 mutations, oregon macromolecule kinase-C ("PRKC") fusions [Exhibit 2]. The distinguished study, that encompasses a full of 254 patients and is being conducted crossed 7 cohorts, volition spot patients receiving darovasertib alone, successful operation with binimetinib [sold nether the marque sanction Mektovi], oregon successful operation with crizotinib, arsenic above. During the dose-escalation and dose-expansion phases of the study, darovasertib volition beryllium taken bi-daily via oral administration. The superior endpoints question to place the dose-limiting toxicity, maximum tolerated dosage[s], positive dosing recommendations for the signifier 2 proceedings on with duration of response.

Exhibit 2. Darovasertib and crizotinib probe arsenic a operation therapy for MUM

Data: IDYA Investor Presentation, September 2022, pp. 11

The 2nd catalyst is that IDYA precocious submitted an investigational caller cause ("IND") exertion to the FDA for its IDE161 compound. If approved, IDYA volition statesman a signifier 1/2 objective proceedings to analyse information and efficacy of its IDE161 programme successful treating patients with coagulated tumours presenting with homologous recombination deficiency ("HRD"). There is presently a pressing request for attraction options for patients suffering from HRD tumours, and a breakthrough present could pull superior attraction from larger players wrong the abstraction successful our opinion. Just arsenic a reminder, IDE161 is simply a small-molecule inhibitor of poly (ADP-ribose) glycohydrolase ("PARG") and has the imaginable to beryllium a potent attraction if it is successful.

It's worthy noting that the IDE161 people is situated wrong the aforesaid clinically validated pathway arsenic poly (ADP-ribose) polymerase ("PARP"), that is progressive successful DNA repair and genomic stability. Although, IDE161 has a differentiated mechanics of action, successful that it reverses the enactment of PAPR enzymes, reducing sensitivity to DNA damaging agents. Pending support of the IND, the institution intends to analyse the pharmacokinetics and pharmacodynamics of IDE161 arsenic a monotherapy successful BRCA1/2-mutant bosom and ovarian crab patients. IDYA's afloat objective pipeline is observed successful Exhibit 3, below.

Exhibit 3. IDYA afloat objective pipeline

Data: IDYA Investor Presentation, September 2022, pp. 5

Additional marketplace information for IDYA concern reasoning

As investors look to enactment superior to enactment successful FY23' we judge there's merit successful analyzing equity flows into and retired of selective stocks. With IDYA, this serves arsenic bully information owed to the deficiency of net connected hand, positive the information its pipeline has yet to afloat person [hence gathering a afloat DCF, motorboat curve and assigning a probability of occurrence are incredibly hard astatine present, not to notation the shifting discount rate].

You'll spot successful Exhibit 4 that regular wealth flows into IDYA were beardown crossed the midpoint and 3/4 constituent of FY22', earlier shifting tide to net-outflows by twelvemonth end. As we've broached the caller twelvemonth flows person remained bottom-heavy, meaning terms enactment has been rather flat.

We'd request to spot equity flows revert to a buying-bias successful bid to make a bully lawsuit for IDYA to re-rate further to the upside. As such, we'll beryllium watching this information intimately successful the coming weeks.

Exhibit 4. Net regular wealth flows into/out of IDYA, 12-months to date

Data: Updata

Looking astatine our constituent and fig studies, we spot that IDYA has scope to perchance thrust higher to the $19 range, a marginal assistance from the existent marketplace price. Again, much buying enactment is needed to warrant different limb up from its existent range, and this unluckily corroborates a neutral view.

Exhibit 5. Small upside targets to $19 range

Data: Updata

Just arsenic 1 last appraisal I wanted to observe the Fibonacci levels that formed from the past precocious successful January FY22' to the May bottom, arsenic seen below. From what it seems, IDYA tested 78% of the downmove astatine $19 successful November and was rejected, and has traded sideways since. It has recovered enactment astatine preceding tab, however, it needs to interruption $19 successful bid to consolidate each of the move, which corresponds to $24. At this constituent successful time, we're waiting connected much grounds for this to occur, but are remaining precise constructive connected IDYA successful the meantime.

Exhibit 6. Fibonacci levels from January FY22' precocious to May FY22' low, IDYA tested 78% of the retracement and was rejected, hasn't retested since

Data: Updata

In short

We are precise constructive connected IDYA fixed its caller hypotheses successful melanoma and coagulated tumours with HRD. However, whether this warrants an contiguous introduction oregon not is simply a antithetic question altogether. At present, there's not the marketplace information to suggest the banal could breakout again to the upside, but we are good alert this could alteration implicit the coming weeks to months. A interruption supra $19-$20 would corroborate this view, and show that investors are rewarding the institution for its latest developments discussed successful this report. For this reason, we complaint a hold, and are trigger-ready connected this name. We promote investors to follow the aforesaid sentiment.

Editor's Note: This nonfiction covers 1 oregon much microcap stocks. Please beryllium alert of the risks associated with these stocks.

Buy broadside equity portfolio strategist serving mandates passim EU/US/APAC. Helping you presumption your portfolios for the aboriginal is my apical priority. Shoot maine a connection to sermon commercialized ides oregon speech portfolio construction. Disclaimer:The opinions expressed successful each articles bash not represent arsenic concern advice. Please retrieve to behaviour your ain owed diligence.