Leerink Partners Downgrades Mirati Therapeutics (MRTX) to Market Perform

Leerink Partners downgraded Mirati Therapeutics (NASDAQ: MRTX) from Outperform to Market Perform with a price target of $20.00 (from $37.00) amid disappointing glesatinib NSCLC progress.

Analyst Michael Schmidt commented, "We're downgrading MRTX to Market Perform from Outperform to reflect added uncertainty around lead pipeline asset glesatinib (c-Met inhibitor), following disappointing updates provided by the company yesterday. MRTX mgmt. reported an update from its key Phase Ib trial in non-small cell lung cancer (NSCLC) patients with genetic c-Met alterations that included one new RECIST response in addition to two previously reported responses in now 11 patients enrolled in the study (20% overall response rate [ORR] in MET+ patients). Due to bioavailability/tolerability issues, MRTX has changed the drug's formulation and is switching patients onto the new formulation in the ongoing Phase II trial. Meanwhile, other c-Met inhibitors have been generating promising data at ASCO and could pose potential competition longer term. We believe MRTX’s earlier stage programs targeting RET and HDAC hold promise, and we see potential for longer-term appreciation as these programs mature as part of MRTX's “precision oncology” development approach; however, we expect the stock to remain range-bound over the next 12 months. Our new PT of $20 (from $37) reflects a lower probability of success for glesatinib, as well as reduced market assumptions to account for potential added competition."

For an analyst ratings summary and ratings history on Mirati Therapeutics click here. For more ratings news on Mirati Therapeutics click here.

Shares of Mirati Therapeutics closed at $18.35 yesterday.

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