Janux Catapults 70% On 'Unprecedented' Results In Prostate Cancer; Vir Goes For A Ride

 Shares of Janux Therapeutics (JANX) skyrocketed Tuesday on "unprecedented" results for an experimental prostate cancer treatment.

The company tested its drug in heavily pretreated patients with metastatic prostate cancer. After 12 weeks, all 16 patients experienced at least a 50% decline in prostate-specific antigen, or PSA. PSA is a protein produced by the prostate. Too much PSA in the blood can signal the presence of cancer.

Notably, 10 out of 16 patients experienced a PSA decline of 90% and five reached a decline of 99%. Three-quarters of patients were able to stay at a 50% decline in PSA, and half maintained a 90% decline for longer than 12 weeks.

Wedbush analyst Robert Driscoll called Janux Therapeutics' results "unprecedented."

"We believe the results exceed even lofty investor expectations and are increasing our peak sales estimate for JANX007 in the United States to $3.0 billion (from $1.7 billion) based on the improving clinical profile of the drug," William Blair analyst Matt Phipps said in a report.

In early trades, Janux stock launched more than 68% to 67.89. Shares opened at a record high. Meanwhile, shares of Vir Biotechnology (VIR), which is working on a similar drug, jumped 11.9% to 9.12.

'Masking' The Treatment

Janux Therapeutics' treatment uses a dual approach, bringing together immune cells called T cells and a target on prostate cancer cells known as PSMA. This allows the immune system to find and destroy the cancer cells.

Janux also uses a technology that allows the drug to enter the tumor microenvironment. Theoretically, this makes the drug safer by limiting its impact on nearby healthy tissue.

"With these results, we believe that Janux has further demonstrated the therapeutic window-widening value proposition of their 'masked' tumor-conditional T-cell engager (TCE) platform, TRACTr, and is now well-positioned to more aggressively evaluate JANX007 in diverse treatment lines and settings across the prostate cancer treatment paradigm," Leerink Partners analyst Jeffrey La Rosa said in a note.

He hiked his price target on Janux stock to 91 from 79, and reiterated his outperform rating.

Importantly, Janux Therapeutics' results appear to top Novartis' approved drug, Pluvicto, and Amgen's xaluritamig, which is in testing for prostate cancer treatment. Of eight patients that could be evaluated, 50% responded to Janux's treatment, William Blair's Phipps said. That compares to the 30% objective response rate in Pluvicto patients and 20% for xaluritamig recipients in Phase 1 testing.

Further, JANX007-treated patients lived for a median of 7.4 months before their cancer worsened. That compares "very favorably" to other treatments, "particularly given the heavily pretreated patient population in the trial," Phipps said.

He has an outperform rating on Janux Therapeutics shares.

Predictable Side Effect

Cytokine release syndrome, or CRS, episodes were largely low-grade, predictable and in the first cycle. CRS is an immune system flare-up tied to some cancer treatments that engage the immune system. There was one case of serious CRS, but in a patient who didn't receive proper mitigation treatment prior to a fifth round of JANX007, Phipps said.

"Based on this context, we do not view it as concerning and expect Janux's TRACTr platform to continue to deliver an improved CRS profile over conventional T-cell engagers," he said.

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