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Vaccines have proven their life-saving power, especially during the COVID-19 pandemic – a testament to the science’s ability to save billions of lives and restore normalcy. Vaccines combat various diseases, from influenza to cancer, underscoring their vital role in global health.

Behind these trailblazing breakthroughs, companies like Eli Lilly and Company and Moderna, Inc. are at the forefront of this revolution - Lilly with groundbreaking treatments in diabetes and obesity and Moderna as a pioneer in mRNA technology.

Yet, even these giants are not immune to setbacks. Eli Lilly saw its stock dip after a weak Q3 report, despite promising Phase 3 data for tirzepatide in heart failure. Moderna also stumbled as political uncertainty around Robert F. Kennedy Jr.'s appointment to a key healthcare role triggered a stock slump.

Despite these drops, analysts project significant upside potential for these stocks. With both LLY and MRNA down from their YTD highs, investors might view this as a chance to jump on the wave of future medical innovations, betting on the resilience and potential of these pharma powerhouses.

Vaccine Stock #1: Eli Lilly

Founded in 1876, Eli Lilly and Company , the Indianapolis-based firm is a global pharmaceuticals leader. Known for game-changing drugs like Trulicity, Humalog, and Mounjaro for diabetes, along with Zepbound for weight loss, Lilly is shaping healthcare’s future. With cutting-edge work in RNA and DNA therapies, its Boston Seaport Innovation Center leads breakthroughs, while partnerships continue to fuel advancements in cancer, arthritis, and mental health treatments.

Eli Lilly's shares have taken a hit, dropping 23% from its YTD high of $972.53 and falling nearly 20% over the past month. Much of this downturn followed its Q3 earnings miss on Oct. 30. Adding to the pressure, on Nov. 14, Lilly sued the Health Resources and Services Administration (HRSA) over its rejection of Lilly's cash replenishment model for reimbursing entities covered by the 340B Drug Pricing Program. Despite these challenges, the stock is up 28.6% YTD.

LLY is currently priced at 57.26 times forward earnings and 14.86 times sales, trading at a premium to its industry peers. This reflects investor confidence in its strong growth prospects.

Eli Lilly has been delivering steady dividends for over three decades, with 10 years of consistent increases. On Oct. 28, the pharma powerhouse announced a $1.30 per share quarterly dividend, payable on Dec. 10. With an annualized payout of $5.20 per share, Lilly’s 0.71% yield reflects both its commitment to investors and its solid earnings base, proving it is not just about breakthrough treatments, but long-term shareholder value.

Shares of Eli Lilly tumbled 6.3% after its disappointing Q3 earnings report on Oct. 30. Sales climbed 20% year over year to $11.4 billion, lagging behind Wall Street’s forecasts for $12.1 billion. Although Eli Lilly earned an adjusted EPS of $1.18, it widely missed expectations of $1.52.

The core issue was that Lilly’s star products, tirzepatide-based Mounjaro and Zepbound, didn’t hit the high notes. Mounjaro soared 121% to $3.11 billion but still missed forecasts. Zepbound brought in $1.26 billion, far below the expected $1.73 billion, mainly due to inventory hiccups.

On top of that, Lilly slashed its fiscal 2024 guidance. Revenue projections now sit between $45.4 billion and $46 billion, with adjusted EPS forecast between $13.02 and $13.52. Despite the setbacks, Lilly is pushing forward, ramping up tirzepatide production and planning more market expansions. The company’s focus on balancing supply and demand could set it up for a strong rebound in the coming quarters.

Analysts predict Eli Lilly’s EPS to more than double to $13.21 in fiscal 2024, with the bottom line projected to surge another 79.5% to $23.71 per share in fiscal 2025.

Tirzepatide Sparks Hope for Lilly’s Future

Eli Lilly dropped game-changing news on Nov. 16, revealing tirzepatide’s breakthrough results in the SUMMIT Phase 3 trial. Not only did it cut heart failure risks by 38%, but it also delivered significant improvements in heart failure symptoms and physical limitations. Patients saw major strides in exercise capacity, weight loss, and inflammation reduction. With regulatory submissions already in motion, Lilly is on track to redefine treatment for HFpEF and obesity, positioning tirzepatide as a potential new standard of care.

LLY stock has a consensus “Strong Buy” rating overall. Out of the 25 analysts covering the stock, 21 suggest a “Strong Buy,” one recommends a “Moderate Buy,” and the remaining three analysts maintain a “Hold” rating.

The mean price target of $1,015.58 suggests that LLY stock has an upside potential of 35.4% from today’s close.

Vaccine Stock #2: Moderna

Moderna, Inc. , founded in 2010 and headquartered in Cambridge, Massachusetts, is a biotech pioneer with a $14.2 billion market cap. Renowned for its mRNA technology, Moderna revolutionized global health during the pandemic with its COVID-19 vaccine.

Its pipeline spans vaccines for respiratory, latent, and infectious diseases alongside groundbreaking cancer and rare disease therapies. With strategic partnerships ranging from AstraZeneca to the Gates Foundation, Moderna continues to innovate, leveraging its platform to address some of the world’s most pressing health challenges.

Moderna soared to fame during the pandemic, pioneering a game-changing vaccine that helped the world navigate COVID-19’s darkest days. However, the company’s meteoric rise met gravity as vaccine demand waned, and so did its revenues.

Since peaking just shy of $500 in 2021, MRNA stock now trades over 77% below its YTD high of $170.47, with a steep 50% drop over the past year and 55% in just three months. This sharp correction presents a potential buy-the-dip opportunity, as Moderna expands its pipeline and forges ahead with groundbreaking biotech innovations.

In terms of valuation, the stock is trading at 4.32 times sales, which is lower than its healthcare sector average of 3.67x and its own five-year average multiple of 60.80x.

On Nov. 7, Moderna reported a solid Q3 earnings beat, with revenue rising 4% year-over-year to $1.9 billion - driven by strong product sales, which accounted for 95% of the total. The boost came from a surge in U.S. sales following the early launch of the updated COVID-19 vaccine and $10 million in respiratory syncytial virus (RSV) vaccine sales, marking a key step in its expanding pipeline. Its EPS hit $0.03, a remarkable turnaround from last year’s $9.53 loss per share, surpassing analysts’ expectations.

However, the stock dipped nearly 3%, reflecting investor concerns. RSV vaccine sales fell short of projections due to approval delays and competitor inventory buildup. International sales lagged, affected by deferred orders from 2022, with a forecasted dip in 2025 before an uptick in fiscal 2026. Additionally, heightened competition in the U.S. COVID-19 market and ongoing legal battles, like the lawsuit with GSK, add further pressure.

Leveraging its mRNA expertise, the company is expanding its pipeline with promising innovations. It is advancing a combination COVID-19 flu shot, which shows strong results without compromising safety. A personalized cancer vaccine, developed in partnership with Merck , is entering phase 3 trials while numerous other programs are progressing. Moderna’s pipeline signals a new era of mRNA breakthroughs on the horizon.

Moderna’s management remains optimistic for fiscal 2024, projecting net product sales between $3 billion and $3.5 billion from its respiratory franchise. R&D expenses are expected to range between $4.6 billion and $4.7 billion, while capital expenditures are anticipated to rise to $1.2 billion, driven by the purchase of the Norwood campus. Plus, Moderna aims for 10 product approvals over the next three years, positioning itself for continued growth and innovation.

Analysts expect the company’s losses to narrow 23.4% annually to $9.44 per share in fiscal 2024 and then another 7.8% in fiscal 2025.

Kennedy's Appointment Triggers Concerns

MRNA stock dipped after RFK Jr.’s nomination as HHS Secretary, sparking concerns over his proposed FDA overhaul. Kennedy, critical of the agency’s industry-funded budget, aims to curb pharmaceutical influence and enhance transparency. While reforms could restore public trust, they threaten longer approval timelines and higher costs, challenging companies reliant on regulatory stability.

For Moderna, dependent on FDA clearance, these shifts could hinder innovation and profitability. However, proponents argue that stricter oversight may level the playing field, benefiting smaller biotech firms. As Kennedy reshapes the FDA’s future, balancing accountability with efficiency remains a critical challenge for the industry.

Recently, Piper Sandler trimmed MRNA’s price target to $69 from $115, but kept an “Overweight” rating. Despite hitting a 52-week low amid declining COVID vaccinations, mRESVIA challenges, and RFK Jr.'s nomination, Piper views the dip as a compelling entry point for investors eyeing Moderna’s long-term growth potential in mRNA innovation.

Among the 24 analysts covering MRNA stock, the consensus rating is a “Hold” - a downgrade from the “Moderate Buy” rating just three months ago. The current outlook is based on six analysts recommending a “Strong Buy,” 15 advising a “Hold,” and the remaining three suggesting a “Strong Sell.”

The mean price target of $83.48 for MRNA suggests more than 112% upside potential from the current levels.

On the date of publication, Sristi Suman Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

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Merck MRK stock closed at $97.44 on Wednesday, which is close to its 52-week low of $94.48.

The company is facing several headwinds like declining sales of the second-largest product, the human papillomavirus (HPV) vaccine, Gardasil in China, weakness in the diabetes franchise and generic erosion of some drugs. There are concerns about the firm’s ability to grow its non-oncology business ahead of the loss of exclusivity of its largest drug, Keytruda, later in the decade.

To top that, the drug and biotech sector saw a major downturn in the past couple of months due to disappointing third-quarter sales and profits, guidance cuts, pipeline setbacks and the appointment of Robert F. Kennedy Jr., a vaccine skeptic, as the head of Health and Human Services. All these factors have significantly hurt shares of almost all large drugmakers.

Merck’s shares have lost 25.6% in the past six months compared with a decline of 11.7% for the industry. The stock has also underperformed the sector and the S&P 500 Index, as seen in the chart below. The stock is also trading well below its 200 and 50-day moving averages.

Merck Stock Underperforms Industry, Sector & S&P 500

The stock’s poor price performance has left investors wondering whether to hold or sell it. Let’s understand the company’s strengths and weaknesses in detail to better analyze how to play the stock following the price decline.

Keytruda: Merck’s Biggest Strength

Merck boasts more than six blockbuster drugs in its portfolio, with blockbuster PD-L1 inhibitor Keytruda being the key top-line driver. Keytruda, approved for several types of cancer, alone accounts for around 50% of the company’s pharmaceutical sales. The drug has played an instrumental role in driving Merck’s steady revenue growth in the past few years.

Keytruda’s sales are gaining from rapid uptake across earlier-stage indications, mainly early-stage non-small cell lung cancer. Continued strong momentum in metastatic indications is also boosting sales growth. The company expects continued growth from Keytruda, particularly in early lung cancer.

Merck is working on different strategies to drive Keytruda's long-term growth. These include innovative immuno-oncology combinations, including Keytruda with TIGIT, LAG3 and CTLA-4 inhibitors. In partnership with Moderna MRNA, Merck is developing a personalized mRNA therapeutic cancer vaccine (V940/mRNA-4157), in combination with Keytruda, for treating adjuvant melanoma and non-small cell lung cancer.

However, Merck is heavily reliant on Keytruda. Though Keytruda may be Merck’s biggest strength and a solid reason to own the stock, it can also be argued that the company is excessively dependent on the drug and should look for ways to diversify its product lineup.

MRK’s Pipeline Progress & Strategic M&A Deals

Merck made meaningful regulatory and clinical progress this year across areas like oncology (mainly Keytruda), vaccines and infectious diseases while also executing strategic business moves like the acquisitions of Eyebiotech Limited, Harpoon Therapeutics and Elanco’s aqua business. It also expanded its existing cancer deal with Japan’s Daiichi Sankyo and signed a collaboration with Exelixis EXEL to advance the development of the latter’s cancer candidate, zanzalintinib.

Merck's phase III pipeline has almost tripled over the past three years, positioning it to launch several new vaccines and drugs over the next five years, with many having blockbuster potential. Merck’s new 21-valent pneumococcal conjugate vaccine, Capvaxive, and pulmonary arterial hypertension drug, Winrevair, have the potential to generate significant revenues for Merck over the long term. Both the products are witnessing a strong launch.

Merck has other promising candidates in its late-stage pipeline, such as MK-0616, an oral PCSK9 inhibitor for hypercholesterolemia, tulisokibart, a TL1A inhibitor for ulcerative colitis and Daiichi-Sankyo-partnered antibody drug conjugates (ADCs).

Declining Sales of MRK's Gardasil in China

Sales of Gardasil are declining in China due to a significant step down in shipments to Merck’s distributor and commercialization partner, Zhifei. Merck expects to continue to see a decline in shipments to China in the fourth quarter of 2024 and into 2025. Though the company is working to increase promotional resources and patient education efforts to increase demand, it will take time. However, Gardasil sales remain strong in almost every major region outside China, including the United States.

MRK Valuation & Estimates

From a valuation standpoint, Merck appears attractive relative to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 10.54 forward earnings, lower than 16.15 for the industry as well as its 5-year mean of 13.49.

MRK Stock Valuation

The Zacks Consensus Estimate for 2024 earnings has declined from $7.82 to $7.72 per share over the past 30 days. For 2025, earnings estimates have declined from $9.64 to $9.43 per share over the same timeframe.

MRK Estimate Movement

Short-Term Investors May Sell MRK Shares

Though Merck’s problems are many, the company has one of the world’s best-selling drugs in its portfolio, generating billions of dollars in revenues. Though Keytruda will lose patent exclusivity in 2028, its sales are expected to remain strong until then. Though Merck does not have any new product or pipeline candidate that can replace Keytruda’s sales when it loses patent protection, it has $14.6 billion in cash and short-term investments on its balance sheet, which it can use to buy companies with promising R&D programs.

In 2025, Merck expects to deliver 6% to 7% growth in revenues, almost the same as its expectations for 2024. In 2024, it expects revenues to be in the range of $63.6-$64.1 billion, which indicates year-over-year growth of 6-7%.

It expects top-line growth in 2025 to be driven by Keytruda, especially in early-stage cancers, new products Welireg, Winrevair and Capvaxive, and the Animal Health segment, partially offset by declining sales of Gardasil in China. Also, the expiration of the agreement with J&J JNJ for Remicade and Simponi is expected to hurt the top line.

We believe investors with a long-term horizon should stay invested in MRK stock, while short-term investors should consider selling the same as the company may take some time to show strong earnings growth.

Merck has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks Investment Research

It has been about a month since the last earnings report for Fiserv (FI). Shares have added about 7.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Fiserv due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Fiserv Beat Q3 Earnings Estimates

Fiserv has reported mixed third-quarter 2024 results, wherein earnings surpassed the Zacks Consensus Estimate, while revenues missed the mark.

FI’s adjusted earnings per share (excluding $1.3 from non-recurring items) of $2.3 beat the consensus mark by 2.2% and gained 17.4% year over year. Adjusted revenues of $4.9 billion missed the consensus estimate by a slight margin but rose a tad on a year-over-year basis.

Fiserv's Quarterly Details

Processing and services’ revenues of $4.2 billion increased 5.7% on a year-over-year basis and missed our estimate of $4.3 billion. Revenues in the Product segment were $978 million, up 13.1% from the year-ago quarter’s actual and surpassing our expectation of $947.7 million.

Revenues from Merchant Acceptance were $2.5 billion, growing 9.3% year over year and meeting our estimated figure. The Financial Solutions segment reported revenues of $2.4 billion, a 4.9% increase from the year-ago quarter and meeting our estimate.

The operating margin for the Merchant acceptance segment was 37.7%, up 290 basis points (bps) on a year-over-year basis. The adjusted operating margin for the Financial Solutions segment was 47.4%, increasing 40 bps from the year-ago quarter.

Balance Sheet & Cash Flow of FI

Fiserv exited the third quarter of 2024 with cash and cash equivalents of $1.2 billion, flat with the third quarter of 2023. The long-term debt was $24.1 billion compared with $24.4 billion in the second quarter of 2024. FI generated $2.2 million in net cash from operating activities, whereas its free cash flow was $1.9 billion. Capital expenditure was $402 million. The company repurchased 7.6 million shares for $1.3 billion in the quarter.

Fiserv's 2024 Guidance

The company has updated its 2024 guidance for adjusted earnings per share to $8.73-$8.80 from $8.65-$8.80 mentioned at the end of the previous quarter. Fiserv updated its year-over-year earnings per share growth guidance to 16-17% from the 15-17% stated at the end of second-quarter 2024. FI updated its year-over-year organic revenue growth guidance from the 15-17% mentioned at the end of the previous quarter to 16-17%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

At this time, Fiserv has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Fiserv has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Zacks Investment Research

Growth stocks are often shares of innovative companies in sectors such as technology, healthcare, cannabis, or consumer services, where rapid expansion or disruptive innovation has the potential to drive stock performance. These stocks are ideal for patient investors who can withstand the short-term headwinds that an evolving company faces.

The Walt Disney Company and Shopify are two examples of growth stocks with “buy” ratings from analysts. Both companies just reported another strong quarter, making Wall Street optimistic about their long-term potential.

#1. The Walt Disney Company

The Walt Disney Company has long been a force in the entertainment and media industries, enthralling audiences worldwide with its iconic characters, theme parks, and blockbuster franchises.

Disney can't really be called a “pure” growth stock, as it has been in the industry since 1923. However, as the entertainment industry evolves, Disney continues to fight to maintain its position in the highly competitive streaming landscape.

Valued at $206.9 billion, DIS stock has gained 26.9% so far this year, compared to the S&P 500 Index’s gain of 23.7%.

Despite having been in the game for a long time with a legacy portfolio, the competitive streaming landscape, which includes Netflix , Amazon , and Apple , has put pressure on Disney's subscriber growth and retention efforts.

However, under CEO Bob Iger's leadership, Disney has taken strategic steps to regain investor trust. Disney’s growth story is one of adaptation and evolution. Aside from streaming, the company's portfolio includes intellectual property (IP) from Pixar, Marvel, and Star Wars, as well as Disney Experiences like theme parks, resorts, cruises, and more.

In the fourth quarter of fiscal 2024, diluted earnings per share (EPS) increased by an impressive 79%, while revenue increased by 6%, driven by growth in the entertainment segment. At the end of the quarter, the company had 174 million Disney+ Core and Hulu subscribers, as well as more than 120 million Disney+ Core paid subscribers.

For the full fiscal year 2024, revenue increased by 3% to $91.4 billion, while earnings more than doubled to $2.72 from $1.29 in fiscal 2023.

Disney is also a dividend stock, yielding 1.58% with a forward payout ratio of 33.3%. This implies that its dividends are currently sustainable, with room for future dividend increases. The company intends to align dividend growth with earnings growth in the long run. In addition, it plans to repurchase $3 billion in shares in fiscal 2025.

Looking ahead, management expects high-single-digit adjusted earnings growth in fiscal 2025 but double-digit EPS growth in both fiscal 2026 and 2027. Analysts predict a 9.3% increase in earnings in fiscal 2025, followed by 11.8% growth in fiscal 2026.

Overall, Wall Street analysts rate Disney stock as a "strong buy.” Of the 29 analysts who cover DIS, 19 recommend it as a "strong buy," three suggest a "moderate buy," and seven rate it a "hold.”

Analysts have set a mean price target for Disney stock of $125.92, which is 10.2% higher than current levels. Its high target price of $140 indicates an upside of 22.6% over the next 12 months.

Despite the competition, Disney's long-term prospects remain promising thanks to its unparalleled brand strength, extensive intellectual property library, and diverse revenue streams.

Disney's stock is trading at 20 times forward 2025 earnings and nine times forward sales. Disney is also the less expensive stock to buy right now relative to its peer Netflix, which has a forward P/E ratio of 36x.

#2. Shopify

With a market cap of $134.1 billion, Shopify has transformed the e-commerce landscape by enabling millions of businesses around the world to set up online stores using its platform.

Investors and analysts are optimistic about the company's consistent revenue growth, which is driven by subscription-based services and merchant solutions. Shopify's stock is up 34% year-to-date, outpacing the broader market.

After a period of slowdown in the post-pandemic market, Shopify's growth rate has picked up in recent quarters.

In its most recent third quarter, Shopify reported 26% revenue growth to $2.1 billion, highlighting resilience amid the global e-commerce slowdown. Gross Merchandise Volume (GMV) also increased 24% year-over-year, driven by increased merchant adoption and enhancements to the platform's capabilities with artificial intelligence (AI). Q3 also marked the company's sixth consecutive quarter of revenue growth of more than 25%, excluding its logistics operations.

While revenue growth remains robust, Shopify's high reinvestment rate in innovation and infrastructure has yet to put it on track to sustainable profitability. This is not unusual for a growing stock. However, in the third quarter, net income came in at $828 million, compared to $718 million in the year-ago quarter.

The company generated $421 million in free cash flow (FCF), representing an FCF margin of 19%. Management expects revenue growth to be in the mid- to high-twenties percentage rate in Q4, while the free cash flow margin could be around 21%. Shopify continues to attract small and medium-sized businesses (SMBs) searching for low-cost e-commerce solutions.

Analysts covering Shopify stock expect revenue and earnings to increase by 24.5% and 79% for the full year 2024. Revenue and earnings could further increase by 22% and 15.3% in 2025.

Shopify is now valued at 12 times forward 2025 estimated sales, compared to its five-year historical average of 23.4 times sales. Shopify's stock remains an appealing growth story for long-term investors. Its strong brand reputation and innovative use of AI and machine learning position it well to capture a larger share of the e-commerce market.

After SHOP's robust Q3 performance, Evercore ISI analyst Mark Mahaney maintained his “buy” rating for the stock. The analyst stated, “Despite the high valuation multiples, the premium fundamental trajectory of Shopify’s business, characterized by sustained revenue growth and rising margins, supports the Buy rating.”

Overall, Wall Street rates SHOP stock a “moderate buy.” Of the 44 analysts covering SHOP, 25 rate the stock a “strong buy,” one has a “moderate buy” recommendation, and 18 suggest a "hold.”

Based on its mean price target of $111.50, SHOP stock has an upside potential of 5.1% from current levels. Plus, its high target price of $140 suggests the stock could go as high as 31% over the next 12 months.

On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

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On Wednesday, Pyxis Oncology, Inc. released preliminary data from the ongoing Phase 1 clinical dose escalation study evaluating PYX-201 in multiple solid tumors.

Among evaluable Head and Neck Squamous Cell Carcinoma (HNSCC) patients treated at an identified dose range of PYX-201 from 3.6 – 5.4 mg/kg (n=6), a confirmed 50% objective response rate (ORR) was observed, including one confirmed complete response (CR) and two confirmed partial responses (PR).

The company additionally announced a Clinical Trial Collaboration Agreement with Merck & Co Inc for a Pyxis Oncology-sponsored study of PYX-201 in combination with Merck’s Keytruda (pembrolizumab) in patients with 1L and 2L HNSCC, HR+/HER2- breast cancer, and triple-negative breast cancer (TNBC) and sarcoma.

• PYX-201 and Keytruda combination dose escalation and expansion study in 1L and 2L HNSCC with preliminary clinical data readout expected in the second half of 2025.
• PYX-201 monotherapy study in 2L and 3L HNSCC patients who are platinum and PD-1 inhibitor experienced, with preliminary clinical data readout expected in the second half of 2025.
• PYX-201 monotherapy study in 2L and 3L HNSCC patients who are EGFR and PD-1 inhibitor experienced, with preliminary clinical data readout expected in the first half of 2026.

Exploratory PYX-201 Phase 1 monotherapy expansion cohorts are planned for ovarian cancer, NSCLC, HR+/HER2 breast cancer, TNBC, and sarcoma. Preliminary clinical data are expected in the second half of 2025.

• The company also expects to initiate the PYX-201 and Keytruda combination study in HR+/HER2 breast cancer, TNBC, and sarcoma, with preliminary clinical data expected in the second half of 2025 and the first half of 2026.
• Preclinical studies of PYX-201 combined with other agents in ovarian cancer and NSCLC will commence in 2025, followed by clinical studies with preliminary clinical data expected in 2026.

PYX-201 demonstrated favorable preliminary tolerability profile data with low incidence of dose discontinuation, interruptions, or delays due to treatment-related adverse events.

William Blair analysts note that PYX-201 shows limited effectiveness outside of head-and-neck cancer, with only 8.7% of patients (2 out of 23) responding to tolerable doses of 3.6 mg/kg, 4.4 mg/kg, and 5.4 mg/kg.

“At this point, we are unsure whether the three unconfirmed responses could ultimately be confirmed,” the analysts writes.

The analysts has reduced the probability of success for PYX-201 to 10% from 35%. The updated fair value stands at $250 million or roughly $4.25 per share, comprising $1.77 per share from PYX-201 and $2.48 per share of cash.

With no major stock-moving events expected until the second half of 2025, the analysts estimate the stock will trade around $2.80 per share soon. William Blair says it includes $1.77 per share for PYX-201 and $1.07 for remaining cash by late 2025.

William Blair downgrades Pyxis to Market Perform, saying, “Since we view the head-and-neck cancer results as difficult to differentiate, coupled with modest activity in other solid tumor histologies.”

Price Action: PYXS stock is down 42.15% to $2.21 during premarket trading on Thursday.

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