Repare Therapeutics Inc.

Company Overview

Repare Therapeutics Inc. (NASDAQ: RPTX) is a clinical-stage precision oncology company focused on the development of synthetic lethality-based therapies for patients with cancer. Repare Therapeutics was founded in 2016 by a team of experienced cancer biologists and drug developers. The company is headquartered in Toronto, Canada, and has offices in San Francisco, California.

Key Highlights

• RP-3500 continues to show promising efficacy and safety data in Phase 1/2 clinical trials: In the most recent update, RP-3500 was shown to be well-tolerated and to have a favorable safety profile. The drug was also shown to be effective in shrinking tumors in patients with solid tumors.
• Repare Therapeutics is advancing RP-3500 into Phase 2 clinical trials in multiple tumor types: The company is currently enrolling patients in Phase 2 clinical trials of RP-3500 in patients with colorectal cancer, pancreatic cancer, and triple-negative breast cancer.
• Repare Therapeutics is also developing a pipeline of other product candidates: The company is currently developing CCNE1-SL inhibitors and Polθ inhibitors. These drugs are also based on the principle of synthetic lethality, and they are being developed to treat a variety of cancer types.
• Seasoned Management: The founders of Repare Therapeutics Inc. are a team of experienced cancer biologists and drug developers who are passionate about developing new therapies that could improve the lives of patients with cancer. 
  • Ameet Desai, M.D., Ph.D., is the company's Chief Executive Officer and Co-Founder. Dr. Desai is a physician-scientist who has spent his career focused on developing new treatments for cancer. He is a graduate of Harvard Medical School and the Massachusetts Institute of Technology, and he completed his postdoctoral training at the Whitehead Institute for Biological Research. Dr. Desai has published over 100 papers in peer-reviewed journals, and he is a Fellow of the American Association for the Advancement of Science.
  • Stephen Harrison, Ph.D., is the company's Chief Scientific Officer and Co-Founder. Dr. Harrison is a world-renowned cancer biologist who has made significant contributions to our understanding of the molecular basis of cancer. He is a graduate of the University of Cambridge and the University of Oxford, and he completed his postdoctoral training at the Whitehead Institute for Biological Research. Dr. Harrison has published over 200 papers in peer-reviewed journals, and he is a member of the National Academy of Sciences.

Technical Observation

On the daily price chart, RPTX shares have registered a breakout above the downward sloping trendline and moved ~22% after the breakout. However, stock is down ~14% from recent swing high level and formed a double bottom kind of pattern on daily price chart. Also, after forming a double bottom the stock registered some reversal from the same levels and recorded two consecutive days of green candle. Moreover, the leading momentum indicator 14-day RSI is hovering in a neutral territory at 47 and registered a reversal after testing RSI 40 level which indicates that the Bulls are trying to get control over bears. Further, RPTX shares are taking support of the upward sloping trendline and recent price actions indicates that the stock is taking support of the same. However, the overall broader trend in the stock is bearish as its shares are trading well below the short-term as well as long-term crucial support levels of 20-day, 50-day, 100-day, and 200-day EMAs.

Stock Recommendation

The company has a strong management team with deep experience in cancer biology and drug development. The company's founders and executives have extensive experience in developing and commercializing new cancer therapies. Repare Therapeutics has a pipeline of product candidates that are based on the principle of synthetic lethality. These drugs have the potential to treat a variety of cancer types. Further, the company has raised over USD 200 million in funding, which will allow it to advance its product candidates through clinical development and commercialization.

From the technical analysis standpoint, the broader trend is bearish as stock is hovering below the short-term as well as long-term crucial support levels. However, the recent price actions on the daily price chart including breakout above the downward sloping trendline, double bottom pattern, support of the upward trending trendline and RSI above 40 indicates an upside potential in the stock from the current trading levels. Hence, based on the above rationale, a “Speculative Buy” has been rating assigned to Repare Therapeutics Inc at the closing price of USD 9.47 (as of May 19, 2023).

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is May 19, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by the individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.