Olema Pharmaceuticals (OLMA) shares nearly tripled on Nov. 18 after Roche (RHHBY) reported strong clinical results for its breast cancer drug giredestrant. Shares retreated slightly in intraday trading, closing up "just" 136% higher. OLMA, however, continues to gain in Wednesday trading.
The biotech stock skyrocketed on the news since OLMA is also developing an oral SERD – next-generation treatments that degrade estrogen receptors in hormone-driven breast cancer.
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Following this explosive move, Olema stock is trading at nearly 7x its price in early April.
Why Is Roche's Update Positive for Olema Stock?
Roche's giredestrant has become the first oral SERD to outperform an aromatase inhibitor in early stage breast cancer.
This matters for OLMA stock since the biotech's lead candidate, palazestrant, is also an oral SERD targeting the same disease.
The positive read-through suggests the drug class is clinically validated, boosting confidence in the biotech firm's pipeline.
In short, the company's palazestrant is now seen as a more viable contender in a multibillion-dollar market and that could unlock significant further upside in Olema Pharmaceuticals over time.
Oppenheimer Sees Massive Further Upside in OLMA Shares
Oppenheimer's senior analyst Matthew Biegler also dubbed Roche's data " a welcome surprise," noting that early breast cancer wasn't even factored into his model for Olema shares.
Biegler now sees a 75% probability for palazestrant to prove successful, versus 50% before.
The investment analyst maintained his "Outperform" rating on the biotech stock and raised its price target to $45, indicating potential upside of another 105% from current levels.
Oppenheimer's bullish view reflects growing confidence that Olema could carve out a meaningful share of the early breast cancer market.
Despite a massive initial surge, Biegler's upwardly revised price target suggests there's still room for OLMA shares to run if the company's own clinical data can deliver.
How Wall Street Recommends Playing Olema Pharmaceuticals
Other Wall Street analysts seem to agree with Biegler's constructive stance on Olema shares.
According to Barchart, the consensus rating on OLMA stock currently sits at "Strong Buy" with the mean target of about $24 indicating potential upside of roughly 9% from here.
This article was generated with the support of AI and reviewed by an editor. On the date of publication, the editor did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
