Buy Rating Affirmed for Kronos Bio Amid Promising KB-0742 Data and Solid Financial Footing

H.C. Wainwright analyst Robert Burns reiterated a Buy rating on Kronos Bio (KRON – Research Report) today and set a price target of $2.25.

Robert Burns has given his Buy rating due to a combination of factors surrounding Kronos Bio’s lead compound, KB-0742. The anticipation of the expansion cohort data from this compound at the upcoming ASCO 2024 conference plays a significant role in this optimistic outlook. Interim Phase 1 clinical data presented at a recent Triple meeting showed promising signs, such as the 60mg dose leading to a substantial reduction in a direct substrate target of CDK9, which is consistent with anti-tumor activity seen in preclinical models. Additionally, pharmacokinetic results indicating a favorable terminal half-life for KB-0742, coupled with a partial response in a specific type of tumor, further underpin Burns’s confidence in the therapy’s potential, despite a currently low response rate.
Financial considerations also influence this rating, with Kronos Bio’s reported fourth-quarter net loss being narrower than expected, thanks to lower operating expenses. The revised full-year net loss projection for 2024 and Kronos’s solid cash position, expected to sustain operations into the second half of 2026, contribute to the reiteration of the Buy rating. While the price target was slightly adjusted, the valuation remains grounded in a discounted cash flow analysis, factoring in the probability of approval and other financial metrics. Risks, as noted by Burns, include challenges in development, regulatory hurdles, potential negative clinical data, and dilution risk over the medium to long term.

Based on the recent corporate insider activity of 14 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of KRON in relation to earlier this year.

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Kronos Bio (KRON) Company Description:

Kronos Bio Inc is a clinical-stage biopharmaceutical company dedicated to the discovery and development of novel cancer therapeutics designed to transform patient outcomes through a precision medicine strategy by targeting dysregulated transcription.