Stonegate Capital Partners has initiated coverage on OS Therapies Inc. (NYSE: OSTX), highlighting the company's significant progress toward bringing its lead immunotherapy OST-HER2 to market for recurrent pulmonary metastatic osteosarcoma. The FDA confirmed that OST-HER2 meets the biological definition of a Regenerative Medicine Advanced Therapy (RMAT) and issued a Biologics License Application (BLA) number in preparation for an Accelerated Approval submission. This regulatory milestone comes as final 12-month Event Free Survival results from the Phase 2b trial demonstrated statistically significant improvement, supported by interim 2-year Overall Survival data.
The company has secured a U.S. commercial partnership with Eversana and is positioning for a potential U.S. launch in the first half of 2026. OST-HER2, built on a listeria-based immunotherapy platform, addresses an area with no new FDA-approved therapies in over 40 years. Beyond osteosarcoma, OS Therapies expanded its portfolio by acquiring Ayala's listeria immunotherapy platform, which adds four additional clinical-stage and eight pre-clinical-stage programs. The company also formed OS Animal Health, a subsidiary to explore applications of OST-HER2 in canine osteosarcoma, supported by positive veterinary trial data.
In August 2025, OS Therapies held a productive End of Phase 2 Meeting with the FDA, aligning on CMC and non-clinical matters, and confirming no safety concerns with OST-HER2. The company remains on track to begin rolling BLA submissions in September 2025. Internationally, OS Therapies has submitted an ILAP to the UK MHRA and scheduled an EMA rapporteur meeting in October 2025, with the agencies signaling an intent to synchronize reviews via Project Orbis. If approved before September 30, 2026, OST-HER2's rare pediatric disease designation could qualify the company for a Priority Review Voucher (PRV), potentially monetizable at approximately $155–160 million based on recent transactions.
For 2Q25, OS Therapies reported a net loss of $4.5 million, compared to $1.6 million in 2Q24, reflecting increased R&D and G&A expenses related to clinical and regulatory progress. Cash stood at $2.8 million at quarter-end, with recent financing extending runway into 2027. Specifically, the company raised $4.2 million in July 2025 through a warrant exchange and inducement, completed an additional $3.7 million warrant exchange in September 2025, and subsequently terminated its equity line of credit, citing reduced burn rate and sufficient liquidity. Management expects this strengthened balance sheet, combined with the potential monetization of a PRV, to provide a multi-year capital runway to support commercialization.
Stonegate Capital Partners' valuation model returns a range of $7.09 to $9.94 with a midpoint of $8.29 based on a discount rate range of 12.50% to 17.50%. The firm notes that this model is highly levered to the out years due to the long-term nature of OS Therapies' industry, leading to the potential for dramatic re-ratings as new information becomes available. The company's progress represents a significant development in pediatric oncology, where new treatment options have been historically limited, while demonstrating how biotechnology companies can leverage regulatory designations and strategic financing to advance toward commercialization.
