Janux Therapeutics (NASDAQ: JANX) stock price has gone vertical this year, making it one of the top-performing biotech companies in Wall Street. It jumped to a high of $61 on Monday about 975% above the lowest point in 2023, giving it a market cap of over $2.45 billion. 

Janux Therapeutics shares have skyrocketed this year as Wall Street analysts have remained optimistic about the company. Some of the most bullish analysts are from companies like Cantor Fitzgerald, BTIG, Wedbush, and JonesTrading. 

The average price target for JANX stock is $58.30, which is a few points higher than the current $56. 

This bullish view for the stock started in February when the biotech company published encouraging safety and efficacy data for its JANX008 drug, which will be used to treat patients with advanced prostate cancer.

According to the company, 86% of the subjects in its trial saw improvements with the first dosage of the drug. It also had low safety hazards among the patients, which is a positive sign for the company.

Therefore, analysts believe that the company will be successful in its trial, which could lead to an acquisition by one of the biggest pharmaceutical companies. Most of these firms believe that it makes sense to acquire biotech companies with newer drugs to boost their growth.

Still, there are some risks for investing in Janux. First, the JANX007 and JANX008 drugs are in their first phase of testing. As we have seen with other companies, a lot can happen between the first and third phases.

The other risk is that the company could dilute its shareholders again. In February, the company raised $296 million as the stock surged. These funds helped to boost its balance sheet since the company ended the fourth quarter with $344 million in cash. 

It is not clear whether the company will raise cash again since its losses are not all that big. Janux Therapeutics had a net loss of $58.3 million in 2023. 

JANX chart by TradingView

The weekly chart shows that the JANX share price made a strong bullish breakout in February this year. This rebound happened after the stock formed a falling wedge pattern, which is usually a bullish sign. 

The stock has remained above the 50-week moving average and the 23.6% Fibonacci Retracement level. A closer look shows that the stock has formed a double-top pattern around $58.65 and whose neckline was at $34.68. In most cases, this pattern is usually a bearish signal.

Therefore, I believe that the Janux Therapeutics share price will either pull back or retreat in the near term. The key catalyst to watch will be the company’s financial results, which will come out on May 9th.

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