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Barclays Sees 137% Upside for Relay Therapeutics Stock

Barclays upgrades Relay Therapeutics, forecasts over 137% stock surge with $15 target on breast cancer treatment potential.

By Bill Bullington

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5/10, 11:13 EDT
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Key Takeaway

  • Barclays upgrades Relay Therapeutics (RLAY) to overweight, setting a price target of $15, indicating a 137% potential upside from its current price.
  • Relay's RLY-2608 targets a $4 billion market in HR+/HER2- breast cancer, promising superior efficacy and safety over existing treatments.
  • Analyst consensus views RLAY positively, with an average price target of $21.96, suggesting significant stock potential.

Barclays Upgrades Relay Therapeutics

Barclays has upgraded Relay Therapeutics to overweight from equal weight, setting a price target of $15 per share. This adjustment suggests a potential upside of more than 137% from the stock's closing price of $6.31 on Thursday. The biotechnology and drug discovery company has seen a 40% decline in its stock price in 2024. Analyst Peter Lawson from Barclays highlighted the potential market opportunity for Relay Therapeutics' proposed breast cancer treatment, emphasizing the significance of their PI3Kalpha inhibitor, RLY-2608, in the HR+/HER2- breast cancer segment.

Market Opportunity and Clinical Data

Lawson pointed out a $4 billion market opportunity for Relay's mutant selective PI3Kalpha inhibitor in treating HR+/HER2- breast cancer. This represents approximately 35% of the $12 billion total sales expected in 2024 for another class of drugs, CDK4/6 inhibitors, approved for the same condition. He believes that the second half update will demonstrate RLY-2608's superior efficacy and safety profile over existing PI3Kalpha inhibitors like alpelisib and inavolisib. Lawson's analysis of existing clinical data suggests that RLY-2608 has shown promising early results with significant differentiation from current treatments.

Analyst Consensus and Stock Potential

The analyst consensus on Relay Therapeutics Inc. (RLAY) includes 12 ratings, with 6 strong buys, 4 buys, and 2 holds, indicating a generally positive outlook on the stock. The current price of the stock is $6.29, with a highest price target of $29.00, an average price target of $21.96, and a lowest price target of $10.60. This range of targets reflects a substantial upside potential, with Barclays' forecast being particularly optimistic.

Street Views

  • Peter Lawson, Barclays (Bullish on Relay Therapeutics):

    "We believe the 2H update will help show the superior efficacy/safety profile for Relay’s PI3Kalpha (RLY-2608) over existing PI3Kalpha inhibitors like alpelisib and inavolisib... Based on our analysis of existing clinical data, we believe RLY-2608 has shown encouraging early data with clear signs of significant differentiation vs. existing molecules."