Bank of America Securities analyst Alec Stranahan reiterated a Buy rating on Day One Biopharmaceuticals yesterday and set a price target of $17.00.
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Alec Stranahan has given his Buy rating due to a combination of factors surrounding Day One Biopharmaceuticals’ strategic acquisition of Mersana Therapeutics. The acquisition is seen as a strategic fit for Day One’s mission, potentially offering a swift path to market for their pipeline. Mersana’s lead asset, Emi-Le, targets B7-H4 using a novel cytotoxic platform, which could fill a gap in Day One’s early-stage pipeline and provide a quick registration path if successful.
Furthermore, the data from ACC-I trials show promising results, with a high objective response rate and manageable safety profile, suggesting a significant opportunity for value generation. The acquisition is fully funded by Day One’s current cash position, and the potential for rapid development in ACC, along with the possibility of exploring other indications, supports the Buy rating. The deal terms also offer additional value through contingent milestones, further enhancing the investment potential.
In another report released today, Needham also reiterated a Buy rating on the stock with a $16.00 price target.