NRIX Stock Clocks Worst Day Ever After Sanofi Discontinues Trial Of Licensed Drug: Wells Fargo Slashes Price Target

• Wells lowered its price target on Nurix Therapeutics to $20 from $25 and maintained an Equal Weight rating on the shares.
• The firm called the discontinuation a negative surprise, noting that it had attributed about $400 million of value to the discontinued program.
• With the asset gone, Nurix now has fewer internal pipeline catalysts to drive upside, the analyst said.

Shares of Nurix Therapeutics (NRIX) slumped 38% on Wednesday, clocking its worst day ever, after Sanofi said it was ending development of the experimental oral drug SAR448272 that it licensed from Nurix, prompting Wells Fargo to lower its price target on the company.

Paris-headquartered Sanofi notified Nurix on Tuesday that it is ending the early-stage first-in-human trial of SAR448272 and terminating the program entirely. The compound was being explored for type 2 inflammatory and autoimmune conditions such as atopic dermatitis and asthma.

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Wells subsequently lowered its price target on Nurix Therapeutics to $20 from $25 and maintained an Equal Weight rating on the shares. The firm called the discontinuation a negative surprise, noting that it had attributed about $400 million of value to the discontinued program. With the asset gone, Nurix now has fewer internal pipeline catalysts to drive upside, the analyst said. Wells’s new price target implies a potential downside of about 23% from the stock’s last close on Tuesday.

Loss Of Milestone Payments Weighs On NRIX

Sanofi’s decision to discontinue eliminates any further development, regulatory, or commercial milestone payments and royalties that Nurix had been eligible to receive specifically for this program. Nurix was in line for roughly $455 million in additional milestones on the asset alone, plus potential royalties on future sales. The company had already received about $139 million from Sanofi under their 2019 collaboration, including a $10 million payment earlier this year when Sanofi initiated the early-stage trial.

Nurix said it remains eligible for milestones and royalties on other previously licensed programs under the same collaboration, should Sanofi choose to advance those. The announcement does not change the company’s cash runway guidance, it added. As of August 31, Nurix held $1.1 billion in cash, cash equivalents, and marketable securities, which it expects will fund operations into the second half of 2029.

“While today’s news is disappointing, Nurix remains in a strong position, with a substantial cash runway, three clinical-stage programs across our wholly owned and partnered portfolio, and an exciting preclinical pipeline,” CEO Arthur T. Sands said on Tuesday.

Nurix has no approved drugs. Its revenue comes almost entirely from collaboration payments, including deals with Roche, Gilead, and Pfizer in addition to Sanofi.

How Did NRIX Retail Traders React?

On Stocktwits, retail sentiment around NRIX stock jumped from 'neutral' to 'extremely bullish' territory over the past 24 hours, while message volume rose from 'high' to 'extremely high' levels.

A Stocktwits user highlighted that the discontinued drug wasn’t the company’s main pipeline.

Another termed the selloff as “ridiculous.”

NRIX stock has slumped 16% year-to-date. 

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