Stifel Nicolaus has initiated coverage on Inhibrx Biosciences (INBX), highlighting upcoming clinical data for ozekibart in chondrosarcoma and advanced colorectal cancer as key near term regulatory and readout milestones for investors to monitor.

Stifel Nicolaus’s new coverage and focus on upcoming ozekibart readouts arrives after a volatile run, with a 7 day share price return of 18.48% and a very large 1 year total shareholder return. This suggests that momentum has recently picked up around key clinical and regulatory milestones.

If this kind of move has your attention, it could be a good time to scan for other early stage biotech names using AI in healthcare and see what stands out in the 31 healthcare AI stocks

With the stock up 18.5% over the past week, trading at about a 99% discount to one analyst’s US$150 price target and backed by early stage revenue of US$1.3 million, is there still a buying opportunity here, or is the market already pricing in future growth?

Preferred Price to Book Multiple of 137.6x: Is it justified?

Inhibrx Biosciences trades on a P/B of 137.6x, which looks rich relative to both its biotech peers and the broader market, especially given its early stage revenue base.

The P/B ratio compares a company’s market value to its book value, which is essentially net assets on the balance sheet. For profitable, asset heavy or mature businesses, it can give a rough sense of how much investors are paying above the accounting value of the company.

For Inhibrx Biosciences, the current P/B of 137.6x stands far above the peer average of 4.4x and the US biotech industry average of 2.3x. That kind of premium suggests investors are paying a very high price relative to current net assets, despite the company reporting a loss of $140.1 million and having only $1.3 million in revenue.

In short, the valuation is heavily tied to expectations around future clinical success and commercialisation rather than today’s balance sheet or income statement. If those expectations shift, the P/B multiple has a lot of room to move, in either direction.

Result: Price-to-book of 137.6x (OVERVALUED)

However, the story could change quickly if key clinical trials disappoint or if fresh equity raises dilute existing holders at current valuation levels.

Next Steps

Given all of this, does the risk reward trade off here match your own comfort level, or feel stretched at current prices? If you want to see the key concern flagged by the model before making up your mind, review the 1 important warning sign.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.