Guggenheim raises Alumis stock to buy with $18 price target

Guggenheim initiated coverage of Alumis Inc (ALMS) with a Buy rating and an $18 price target, citing the completion of its merger with Acelyrin and progress in its drug development pipeline, particularly the oral TYK2 inhibitor ESK-001 for psoriasis, which showed promising Phase II OLE data. Alumis has also completed patient enrollment for Phase III trials of ESK-001 with topline results expected in Q1 2026, and is advancing other compounds for SLE and multiple sclerosis; however, the company's negative EBITDA raises concerns despite a strong cash position expected to fund operations into 2027.

Analysis

Guggenheim has resumed coverage on Alumis Inc (NASDAQ: ALMS) with a Buy rating and an $18.00 price target, indicating substantial potential upside from its current trading price of $3.43, despite the stock having declined 74% over the past year. This renewed optimism is underpinned by the completion of Alumis's merger with Acelyrin and notable progress in its drug development pipeline. A cornerstone of this pipeline is ESK-001, an oral TYK2 inhibitor for psoriasis, which reported positive 52-week Phase II Open-Label Extension (OLE) data in March, showing sustained or improved efficacy with 61.3% of patients achieving a PASI-90 score and 38.8% reaching PASI-100. These results compare favorably with the 28-week OLE data (PASI-75: 82.7%, PASI-90: 63%, PASI-100: 30.9%), and the drug maintained a confirmed safety and tolerability profile at a 40 mg twice-daily dosage over 52 weeks. Alumis has also completed patient enrollment for its pivotal Phase III ONWARD trials for ESK-001, encompassing over 1,700 participants, with topline results anticipated in the first quarter of 2026; these trials will assess PASI-75 and sPGA scores at Week 16 against an active comparator, Amgen's Otezla. Beyond psoriasis, Alumis is advancing ESK-001 in a Phase IIb LUMUS trial for systemic lupus erythematosus (SLE) with data expected in 2026, and another compound, A-005, a central nervous system-penetrant TYK2 inhibitor, is scheduled to enter Phase II studies for multiple sclerosis in the second half of 2025. Financially, the merger with Acelyrin has resulted in an updated share count and a cash position of approximately $580 million, projected to fund operations into 2027. While this runway is crucial given the company's rapid cash burn and a negative EBITDA of -$351.45 million over the last twelve months, InvestingPro data indicates a healthy current ratio of 3.73. The merger, which gives former Acelyrin stockholders approximately 48% ownership in the combined entity, is a strategic move to bolster Alumis’s financial foundation. Echoing a positive sentiment, H.C. Wainwright also maintains a Buy rating, though it adjusted its price target to $14.00 from $15.00 following updated merger terms.

Key Decisions for Investors

• Investors should evaluate the significant upside potential suggested by analyst price targets, such as Guggenheim's $18.00 for Alumis, while carefully weighing the stock's substantial past-year decline and the inherent risks associated with clinical-stage biotechnology firms.
• Key upcoming catalysts to monitor are the topline results from the ESK-001 Phase III ONWARD trials in psoriasis, expected in Q1 2026, and the Phase IIb LUMUS trial data for systemic lupus erythematosus, anticipated in 2026, as these are critical for future valuation.
• Despite a projected cash runway into 2027, Alumis's considerable cash burn rate and negative EBITDA of -$351.45 million necessitate diligent monitoring of its financial discipline and pathways to future funding or revenue generation.
• The successful integration of Acelyrin post-merger and the subsequent realization of strategic benefits, including an extended financial runway and enhanced capabilities for advancing its immune-mediated disease treatments, are important factors for assessing long-term value.