ALX Oncology is an Intriguing Investment in The Biotech Space

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Written By Marcus Reynolds

ALX Oncology (NASDAQ: ALXO) has recently seen its valuation dip below $500 million, marking a significant shift in investor sentiment towards this biotech firm focused on cancer therapies. With promising developments in its pipeline and a strong financial position, ALXO is garnering renewed attention from investors looking for growth opportunities in the biopharmaceutical sector.

Current Valuation and Market Sentiment

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Having previously commanded a market cap exceeding a billion dollars, ALXO’s valuation has now undergone a substantial correction.

This adjustment follows the presentation of new study findings at prominent events like ASCO, signaling a potential turning point for the company. Despite initial skepticism about its CD47-based approach, recent developments suggest ALXO is approaching or has reached a pivotal phase that merits reconsideration.

Pipeline Focus is Evorpacept

Central to ALXO’s pipeline is evorpacept, a novel therapy targeting the CD47 molecule. Unlike previous attempts in this space, evorpacept shows promise in treating gastric cancer and urothelial carcinoma, as indicated by early signals of activity.

The upcoming data updates, including pivotal trial results, are anticipated to provide further clarity on its efficacy and potential market impact.

Recent Developments and Trial Updates

The spotlight remains on evorpacept, particularly following its combination trials with established treatments like ramucirumab, paclitaxel, and trastuzumab in HER2-positive gastric cancer (ASPEN-06 study).

Although initial results are promising, ongoing evaluations will be crucial in determining its integration into standard treatment protocols.

At ASCO 2024, ALXO reported encouraging outcomes from ASPEN-07, a trial combining evorpacept with enfortumab vedotin for advanced urothelial carcinoma. The study demonstrated a notable objective response rate and disease control, positioning evorpacept favorably in the competitive landscape of cancer therapies.

Financial Stability and Operational Outlook

ALXO’s financial health remains robust with significant liquidity to sustain operations for the foreseeable future. As of the latest quarterly report, the company holds approximately $167.9 million in current assets, including cash and short-term investments, providing a runway of 5 to 6 quarters based on current expenditure rates.

Strengths and Risks


  • Clinical Promise: Evorpacept continues to show differentiated activity in solid tumors, offering renewed optimism despite previous setbacks in other indications.
  • Financial Resilience: Adequate cash reserves bolster ALXO’s ability to navigate through upcoming milestones without immediate financial pressures.


  • Market Perception: Historical failures in targeting CD47 may impact investor confidence despite recent positive data releases.
  • Volatility: Biotech stocks like ALXO are susceptible to market volatility and heightened scrutiny, necessitating cautious investor sentiment.

Investment Considerations

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ALX Oncology presents a compelling case for investment at its current valuation, reflecting a balanced risk-reward proposition in the biopharmaceutical sector. While uncertainties persist, particularly surrounding the viability of CD47-based therapies, the company’s strategic focus and financial prudence mitigate some of these risks.

Viable Candidate for Investors Seeking Exposure to Caner Therapies

ALX Oncology is emerging as a viable candidate for investors seeking exposure to innovative cancer therapies amidst evolving market dynamics. The adjusted valuation and promising pipeline advancements underscore ALXO’s potential to deliver shareholder value in the biopharmaceutical landscape.

For investors willing to navigate the inherent risks of biotech investments, ALX Oncology offers an intriguing opportunity at its current market entry point. As clinical data matures and market conditions evolve, ALXO’s trajectory warrants close monitoring for those interested in positioning themselves strategically within the biopharma sector.


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