On Thursday, BTIG initiated coverage on Cartesian Therapeutics, trading on NASDAQ:RNAC, with a positive outlook, assigning a Buy rating and a price target of $42.00. The stock, currently trading at $16.92, has experienced a challenging period with a 16% decline over the past week.
According to InvestingPro data, analyst price targets range from $22 to $45, suggesting significant upside potential. The firm's analysis highlighted Cartesian's innovative approach in developing mRNA-based CAR-T cell therapies, particularly for autoimmune disorders.
With a market capitalization of $435 million and a strong liquidity position - maintaining more cash than debt on its balance sheet - Cartesian's work is gaining attention in the wake of successful case reports of DNA-based CD19 CAR-T therapies for conditions like systemic lupus erythematosus (SLE) and myasthenia gravis (MG).
The firm noted that Cartesian's mRNA CAR-T therapies offer potent B-cell depleting efficacy with approximately 50% lower cost of goods sold (COGS) compared to DNA-based counterparts. Additionally, these therapies are said to avoid the conventional safety limitations associated with CAR-T treatments. This combination of efficacy and safety is expected to be particularly beneficial in treating autoimmune diseases with significant B-cell involvement.
Cartesian's lead product, Descartes-08, has shown promising results in treating myasthenia gravis. The therapy has demonstrated progressive efficacy through long-term follow-up, positioning it well in a market with over 120,000 patients in the US and EU. This market potential is underscored by the financial success of Vyvgart, which is on a run-rate of over $2 billion just 11 quarters post-launch.
The firm also sees potential for Cartesian's therapies in treating systemic lupus erythematosus, citing significant de-risking due to deep remissions observed with other B-cell depleting approaches. BTIG's assessment suggests that Cartesian's enterprise value, which is less than $400 million on a fully diluted basis, presents an attractive investment opportunity compared to its peers, such as Kyverna Therapeutics, which reached a valuation of over $900 million immediately after its IPO earlier in 2024.
BTIG anticipates investor interest to increase ahead of Cartesian's planned Phase 3 initiation for myasthenia gravis in the first half of 2025. The firm's initiation of Cartesian Therapeutics at a Buy rating with a price target of $42 reflects confidence in the company's therapeutic advancements and market potential.
While the company currently shows weak profit margins and isn't expected to be profitable this year, InvestingPro subscribers can access additional insights through 7 more exclusive ProTips and detailed financial metrics to make more informed investment decisions.
In other recent news, Cartesian Therapeutics has seen promising developments in its clinical trials and operations. The biotech firm recently reported significant results from its Phase 2b trial of Descartes-08, a potential treatment for generalized myasthenia gravis (MG). The trial showed a 71% improvement in MG Composite scores in the Descartes-08 group, compared to a 25% improvement in the placebo group.
In a strategic move, Cartesian converted its Series B Non-Voting Convertible Preferred Stock into common stock, resulting in 23,893,525 shares of Common Stock issued and outstanding. This decision may simplify the company's capital structure and potentially broaden its shareholder base.
Analyst firms have shown confidence in Cartesian's progress. H.C. Wainwright adjusted its outlook on the company, raising its price target from $41.00 to $45.00 and maintaining a Buy rating. Similarly, Mizuho (NYSE:MFG) reaffirmed its Outperform rating, highlighting the competitive edge of Descartes-08.
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