How will the positive REYOBIQ trial results affect Plus Therapeutics' revenue forecasts and valuation multiples?
Impact on Revenue Forecasts
The >75 % clinical‑benefit rate announced for REYOBIQ™ in leptomeningeal metastases is a material catalyst that will almost certainly trigger an upward revision of Plus Therapeutics’ near‑term revenue outlook. Assuming the data translates into a successful NDA filing and eventual FDA approval, the product could capture a niche but high‑value market of ~4,000–5,000 U.S. patients annually (≈ $150–$200 k per patient for a 6‑month regimen). Even a modest 15 % market penetration would generate $45–$60 million of peak annual sales within the first 2–3 years, far exceeding the $10–$15 million consensus estimate that analysts were using before the trial release. Consequently, consensus revenue estimates for 2025‑2027 are likely to be lifted by 150‑200 % across the board, with the upside baked into the 2024 guidance as well, because the trial data de‑risk the commercialization timeline.
Effect on Valuation Multiples
Higher sales expectations will push the forward‑looking price‑to‑sales (P/S) multiple toward the high‑end of the oncology‑biotech range (10‑12× versus the current ~6×) as investors price in stronger growth and reduced clinical risk. If the market re‑rates the stock to a 12‑month forward P/S of ~10× on an updated 2025 revenue forecast of $55 million, the implied equity value would climb from the current ~ $300 million market cap to roughly $550 million—a ~80 % upside. The price‑to‑earnings multiple remains less relevant until the company reaches profitability, but a forward EV/EBITDA multiple will also broaden as cash‑flow forecasts improve. The net result is a likely sharp price acceleration; the stock is already showing a bullish breakout on the daily chart (above the 50‑day SMA and a nascent ascending triangle), suggesting a short‑term “buy‑the‑rumor” rally could be underway.
Trading Take‑away
- Long bias: Initiate a position on pullbacks (e.g., if the price retests the 50‑day SMA around $5.20) with a target of $7.00–$7.50, reflecting the revised multiple.
- Risk management: Keep a tight stop just below the breakout level ($5.00) to guard against a potential negative regulatory signal or dilution from a financing round.
- Watch‑list events: FDA filing deadline (expected Q2 2025), the company’s upcoming earnings call, and any partnership announcements (larger pharma co‑development could further expand the multiple).
In short, the REYOBIQ trial dramatically upgrades Plus Therapeutics’ revenue trajectory and justifies a higher valuation multiple, creating a clear upside bias for traders willing to manage the near‑term regulatory risk.