OLMA Stock Doubles After Roche Cancer Drug Trial Yields Positive Results

Roche was evaluating Giredestrant as an adjuvant endocrine treatment for people with certain types of early-stage breast cancer.

• Olema’s lead product candidate, Palazestrant, belongs to the same class of drugs as Roche’s and is being studied in breast cancer. 
• Oppenheimer raised its price target on Olema Oncology to $45 from $22 and kept an ‘Outperform’ rating on the shares. 
• The analyst’s new price target implies about a 428% upside from the stock’s Monday closing price.

Shares of Olema Pharmaceuticals Inc. (OLMA) more than doubled Tuesday morning on the heels of Roche announcing positive results from its late-stage trial in breast cancer.

Roche was evaluating Giredestrant as an adjuvant endocrine treatment for people with certain types of early-stage breast cancer. In the study, Giredestrant treatment showed a statistically significant and clinically meaningful improvement in invasive disease-free survival compared with standard-of-care endocrine therapy.

Giredestrant is an investigational, oral, selective oestrogen receptor degrader or SERD. According to Roche, this is the first late-stage study of a SERD to demonstrate a significant benefit in the adjuvant setting.

Expert Take

As per Oppenheimer, Olema shares were trading pre-market on news that Roche's (RHHBY) trial met its primary endpoint. The analyst subsequently raised its price target on Olema Oncology to $45 from $22 and kept an ‘Outperform’ rating on the shares.

The analyst’s new price target implies about a 428% upside from the stock’s Monday closing price.

Oppenheimer said it was not expecting this readout, as the entire narrative has been around Roche's different breast cancer clinical trials. Nonetheless, the data are a welcome surprise, it added.

Early breast cancer is a multi-billion-dollar market, and one that the firm did not have in its model. These data also incrementally derisk another Roche drug trial, which is testing oral SERDS against aromatase inhibitors in the frontline metastatic setting, Oppenheimer added.

Olema’s lead product candidate, Palazestrant, is also a SERD being investigated in patients with recurrent, locally advanced, or metastatic forms of breast cancer. It is being evaluated as a single agent in a late-stage trial and in combination with ribociclib in another late-stage trial.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around OLMA stock jumped from ‘bearish’ to ‘extremely bullish’ territory over the past 24 hours, while message volume rose from ‘low’ to ‘extremely high’ levels.

A Stocktwits user expressed pessimism about the stock, noting that the hype had passed by pre-market hours, when the stock was up over 200%.

Another user, however, believes the stock will touch $100.

OLMA stock is up by 233% this year and by 125% over the past 12 months. 

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