Key Takeaways
- ORIC Pharmaceuticals shares fell 22% today after Johnson & Johnson presented early data for JNJ-6143, a rival prostate cancer drug.
- The drop looks too big, since J&J’s data comes from a small early-stage study and ORIC’s own prostate cancer drug is already in a Phase 3 trial.
- At the 50 mg dose, J&J’s drug produced a 75% response rate in 16 patients with measurable disease, and those patients had already been through a median of four treatments.
- ORIC has $388 million in cash and investments and expects it to last into the second half of 2028, past the main readout from its Phase 3.
ORIC Pharmaceuticals (ORIC) is down 22% today, and the bad news isn’t even its own. Over the weekend, Johnson & Johnson (JNJ) presented early data on its experimental prostate cancer drug, JNJ-6143. Investors read it as a direct threat to ORIC’s lead drug, rinzimetostat.
J&J’s “immaculate” numbers
At the ESMO Congress on Saturday, J&J reported Phase 1 results in men with advanced prostate cancer who’d had a median of four prior treatments. At the 50 mg dose, 75% of patients with measurable disease (12 of 16) had a confirmed complete or partial response. And 77% of 38 patients saw their PSA fall by at least half.
Leerink analyst Asthika Goonewardene called the data “immaculate” and said the results “dial up the potential threat level” for rinzimetostat.
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A lot rides on rinzimetostat
Rinzimetostat is ORIC’s most advanced drug. In July, ORIC started Himalayas-1. It’s a Phase 3 trial pairing rinzimetostat with Bayer’s darolutamide in men whose prostate cancer has spread and kept growing after abiraterone, a standard hormone treatment.
J&J’s patients had been through more treatment. But if JNJ-6143 holds up, I’d expect J&J to push it into earlier patients, right where rinzimetostat is headed.
ORIC had $265 million of cash and short-term investments at June 30…
…plus $123 million in long-term investments, or $388 million in all. Management expects that to last into the second half of 2028, past Himalayas-1’s main readout.
At a market value of about $1.1 billion, that still leaves roughly $700 million on the pipeline, and rinzimetostat is the biggest piece of it.
The lung drug is still there
On Friday, ORIC reported an 84% confirmed response rate for enozertinib, its lung cancer drug, in 26 untreated patients. It plans to start a Phase 3 trial in the first half of 2027. This morning, Stifel raised its target to $18 from $14.
Analysts’ consensus target has climbed over the past year…
…to about $22, more than double where the stock trades now.
My take: J&J’s data is a real threat, but it comes from 16 patients in a Phase 1 study. ORIC has a Phase 3 underway, a second drug heading into one, and the cash to reach the readout. Losing [22%] on a rival’s early study looks like too much to me.
Of course, ORIC still owes investors a rinzimetostat update this year. If that update looks weaker next to J&J’s numbers, the selloff will look a lot more reasonable.
So what is ORIC Pharmaceuticals stock actually worth?
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