Oppenheimer on Monday raised its recommendation on Relay Therapeutics (NASDAQ: RLAY) from Perform to Outperform and set a price target of $14.00, a level that the firm says implies roughly an 88% upside from the referenced market price of $7.43.
The upgrade is grounded in Oppenheimer's assessment of the competitive landscape around gedatolisib, the investigational agent being evaluated in the VIKTORIA-1 trial. The firm signaled it expects the VIKTORIA-1 readout to underperform relative to market hopes or, in the extreme, fail - an outcome that would, in its view, create a "beatable bar" for Relay's mutant-selective PI3K inhibitor zovegalisib when used in a triplet therapy regimen.
In articulating that view, Oppenheimer noted similarities between gedatolisib and everolimus, calling attention to everolimus' historical underperformance in PI3K inhibition. The firm also drew a comparison to alpelisib's performance in the EPIK-B5 study, where median progression-free survival was 7.4 months - a reference point used to frame expectations for gedatolisib results.
Relay's shares have endured periods of volatility. The stock experienced pressure beginning in October after VIKTORIA-1's wild-type cohort produced results that exceeded consensus expectations. Oppenheimer, however, expressed skepticism that gedatolisib can replicate that level of success specifically in PI3K-mutant patient populations.
Independent market data from InvestingPro included in the note indicates RLAY is trading near its Fair Value. InvestingPro also records that the shares have climbed 53.2% over the past year and surged nearly 99% over the last six months, even as the company has navigated mixed near-term news. The firm also highlighted that four analysts recently revised earnings estimates on the stock higher.
Relay has also provided its own clinical updates. Interim results presented at the 2025 San Antonio Breast Cancer Symposium showed zovegalisib produced consistent activity in patients with PI3Kα-mutated, HR+/HER2- metastatic breast cancer, with a median progression-free survival of 10.3 months across the overall population analyzed. For the subgroup of second-line patients treated with zovegalisib plus fulvestrant, median progression-free survival was reported at 11.4 months.
Analyst attention beyond Oppenheimer remains: Citizens has reiterated a Market Outperform rating on Relay and maintained a $12.00 price target after competitive updates shown at the European Society for Medical Oncology conference. Citizens' stance was described as positive toward the company's prospects.
Taken together, the Oppenheimer upgrade, Relay's interim zovegalisib data, and peer analyst actions underscore continuing market interest in the company's oncology program and valuation trajectory. Investors and sector observers are watching how upcoming trial readouts and competitive dynamics in PI3K-targeted therapies will affect expectations for both clinical and commercial outcomes.
Key points
- Oppenheimer upgraded Relay from Perform to Outperform and set a $14.00 price target, implying about an 88% upside from $7.43.
- The firm believes a weak VIKTORIA-1 readout for gedatolisib would create an opportunity for Relay's zovegalisib triplet therapy - calling it a "beatable bar."
- InvestingPro data shows RLAY trading near Fair Value with shares up 53.2% over the past year and nearly 99% over six months; four analysts have raised earnings estimates recently.
Risks and uncertainties
- The upcoming VIKTORIA-1 readout for gedatolisib could perform better than Oppenheimer anticipates, tightening the competitive landscape in PI3K-targeted therapies.
- Clinical comparisons referenced by Oppenheimer - including analogies to everolimus and alpelisib's EPIK-B5 median progression-free survival of 7.4 months - indicate variability in trial outcomes that could affect market expectations.
- Market volatility remains a factor as shares have moved sharply in recent months, reflecting sensitivity to clinical news and analyst revisions.