Buy Rating Affirmed for Day One Biopharmaceuticals on Strong Tovorafenib Prospects and Market Impact

Analyst Anupam Rama of J.P. Morgan maintained a Buy rating on Day One Biopharmaceuticals (DAWN – Research Report), boosting the price target to $36.00.

Anupam Rama has given his Buy rating due to a combination of factors which revolve around the strong performance and potential market impact of Day One Biopharmaceuticals’ lead asset, tovorafenib. The analyst sees a high likelihood of a timely approval for tovorafenib in treating refractory pediatric low-grade glioma (r/pLGG), a condition currently lacking approved therapies. Rama’s confidence is supported by positive physician feedback on the efficacy data from the pivotal FIREFLY-1 study, which he anticipates will not be significantly affected by any minor response rates or adverse events that might arise.
Further supporting the optimistic outlook, Rama does not foresee the inclusion of severe warnings, such as a black box warning, which could impact the drug’s market reception. The expectation of a clean label and the unmet need in the r/pLGG space underpin a projected strong launch and revenue generation, with Rama’s sales estimates exceeding the consensus. This leads to the anticipation of share prices reaching the mid-$20s based solely on the r/pLGG setting, with an increased price target to $36 by December 2024 following a discounted cash flow analysis that factors in the drug’s potential in both front-line and refractory settings.

In another report released on April 16, Capital One Financial also maintained a Buy rating on the stock with a $40.00 price target.

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Day One Biopharmaceuticals (DAWN) Company Description:

Day One Biopharmaceuticals Inc is a clinical-stage biopharmaceutical company. It is dedicated towards developing and commercializing targeted therapies for patients of all ages with genetically defined cancers. Initially, it focuses on clinical development efforts on pediatric patients living with cancer, a vulnerable population that has been underserved in the recent revolution in targeted therapeutics and immuno-oncology. The lead product candidate, DAY101, is an oral, brain-penetrant, highly-selective type II pan-rapidly accelerated fibrosarcoma, or pan-RAF, kinase inhibitor.