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Allogene shares maintain Buy rating after FDA RMAT designation granted to ALLO-316 by Investing.com

On Tuesday, HC Wainwright reiterated its Buy rating on Allogene stock (NASDAQ:ALLO) with a $9.00 price target. The recommendation follows Allogene's recent announcement that the U.S. Food and Drug Administration (FDA) has granted Regenerative Medicine Advanced Therapy (RMAT) designation to ALLO-316. This award applies to the treatment of adult patients with CD70-positive advanced or metastatic renal cell carcinoma (RCC).

RMAT status was granted based on clinical data from the TRAVERSE study. It highlights the potential of ALLO-316 to address the needs of patients with difficult-to-treat RCC who have not responded to multiple standard therapies. These therapies include immune checkpoint inhibitors and VEGF-targeted therapies.

Initial results from the TRAVERSE study showed that of ten CD70-positive RCC patients, three had a partial response, with one response not yet confirmed. The disease control rate (DCR) was 100% and the median progression-free survival (mPFS) was 5.0 months. It was noted that most patients in this data set were from the initial dose levels and dose escalation was still ongoing, suggesting the possibility of improved response rates at higher doses.

Regarding safety, the study observed that 5% of patients developed grade 3 or higher cytokine release syndrome (CRS) and 11% experienced neurotoxicity. Updated Phase 1 results from the TRAVERSE trial are scheduled to be presented at the new Society for Immunotherapy of Cancer (SITC) meeting.

HC Wainwright's recommendation reflects a stable outlook for allogeneics, with RMAT status potentially accelerating the development and review of ALLO-316 for RCC treatment. The price target of $9.00 suggests a positive view of the stock's potential over the next 12 months.

In other recent news, Allogene announced it will present preclinical data for ALLO-329, an AlloCAR-T candidate for the treatment of autoimmune diseases, at the upcoming ACR Convergence 2024. The company plans to file an investigational new drug (IND) application with the FDA in the first quarter of 2025, with proof-of-concept data expected by the end of the same year.

Financial house Piper Sandler has maintained its overweight on allogeneic after a study published in the journal Cell describing the use of allogeneic CD19-CAR-T treatment in patients with autoimmune diseases. These recent developments provide investors with insight into Allogene Therapeutics' ongoing projects and future directions.

Investing Pro Insights

While Allogene (NASDAQ:ALLO) received a positive recommendation from HC Wainwright and an RMAT designation for ALLO-316, it is important to consider the company's financial condition. According to InvestingPro data, Allogene has a market cap of $585.51 million, reflecting its current valuation in the biotechnology sector.

InvestingPro Tips highlights that Allogene has more cash than debt on its balance sheet, which could be beneficial for funding ongoing clinical trials and research. However, the company is burning through cash quickly, which is typical for development-stage biotech companies. This burn rate is particularly relevant given the ongoing TRAVERSE trial and the potential acceleration of ALLO-316 development.

Another InvestingPro tip suggests that analysts don't expect the company to be profitable this year. This is consistent with the company's focus on research and development, as demonstrated by the ALLO-316 trial results discussed in the article. The company's trailing twelve-month revenue through the second quarter of 2024 was just $0.07 million, highlighting its pre-commercial phase.

For investors interested in deeper analysis, InvestingPro offers additional tips and insights that could provide a comprehensive overview of Allogene's financial health and market position. There are 7 additional Allogene InvestingPro tips available that could be valuable to those considering investing in this promising but still developing biotech company.

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