Cogent Biosciences (COGT) has drawn fresh attention after submitting a New Drug Application to the FDA for bezuclastinib in NonAdvanced Systemic Mastocytosis, supported by statistically significant SUMMIT trial data and its prior Breakthrough Therapy Designation.

The share price sits at $35.57 after a 90 day share price return of 118.62%, while the 1 year total shareholder return of 338.59% points to strong momentum building around bezuclastinib and recent pipeline updates.

If Cogent’s story has you thinking about other drug developers, this could be a good moment to scan healthcare stocks for ideas across the wider sector.

After such a strong run, Cogent now trades at $35.57, around 41% below the average analyst price target. This raises a key question for investors: is there still upside left here, or is the market already pricing in future growth?

Price to Book of 27.8x: Is it justified?

Cogent trades on a P/B of 27.8x at its last close of US$35.57, which is far richer than peers and indicates a market premium.

P/B compares the share price with the company’s book value per share, which is essentially net assets on the balance sheet. For early stage biotechs with minimal revenue and ongoing losses, a high P/B often reflects expectations around future cash flows rather than current fundamentals.

Here, Cogent is described as expensive on a P/B of 27.8x versus a peer average of 8.3x, and also expensive versus the broader US Biotechs industry at 2.7x. That is a steep gap, suggesting the current price reflects materially higher expectations for bezuclastinib and the rest of the pipeline than what is implied for the typical biotech name.

Result: Price-to-book of 27.8x (OVERVALUED).

However, you also have to weigh clinical or regulatory setbacks for bezuclastinib and ongoing net losses of US$294.372 million as potential pressure points for sentiment.

Build Your Own Cogent Biosciences Narrative

If you see the numbers differently or prefer to stress test the assumptions yourself, you can build a fresh view in minutes by starting with Do it your way.

A great starting point for your Cogent Biosciences research is our analysis highlighting 1 key reward and 4 important warning signs that could impact your investment decision.

Looking for more investment ideas?

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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.