Institutional Investor Builds Significant Stake in ALX Oncology

Institutional interest appears to be returning to the biotechnology space. A notable vote of confidence has been placed in ALX Oncology Holdings, a specialist in cancer treatments, with the recent disclosure of a major share acquisition by healthcare-focused investment firm TCG Crossover. This move suggests growing institutional belief in the company's developmental trajectory.

In a filing submitted to the U.S. Securities and Exchange Commission (SEC) on January 30, TCG Crossover, led by Chen Yu, reported holding a 9.9% stake in ALX Oncology. This position amounts to 13,011,849 shares and is classified as passive, indicating the investor has no present intention to exert influence over corporate strategy or management.

The holding is spread across the firm’s "TCG Crossover Fund II" and "TCG Crossover Fund III," with each fund owning approximately 6.5 million shares. Notably, this calculation excludes additional shares from pre-funded warrants. Regulatory ownership limits, which cap the reported stake at a maximum of 9.99%, are the reason for this exclusion.

Share Price Reaction and Divergent Analyst Views

The market has reacted positively to this development. Between January 30 and February 7, the company's share price climbed from $1.74 to $2.05, marking a significant advance. The question now is whether this endorsement from a sector-savvy investor can catalyze a more sustained upward trend.

Should investors sell immediately? Or is it worth buying Alx Oncology Holdings ?

Wall Street analysts currently maintain a consensus rating of "Moderate Buy" for the stock, with an average price target of $2.50. This implies a potential upside of roughly 22% from recent levels. However, expert opinions on the stock's valuation vary widely. The most bullish forecast sees shares reaching $4.00, while more cautious estimates place the target as low as $1.00.

Clinical Pipeline Remains the Core Focus

The primary value driver for ALX Oncology continues to be its lead candidate, evorpacept (ALX148). This CD47-blocking asset is currently undergoing clinical trials for the treatment of solid tumors. Furthermore, the company's pipeline includes NX-1607, a CBL-B inhibitor in early Phase 1 testing.

The company's future valuation is heavily dependent on achieving key clinical milestones for evorpacept. Consequently, investor attention is firmly fixed on upcoming data readouts, which will be critical in determining the long-term viability of ALX Oncology's oncology platform.