On Tuesday, BTIG reiterated its Buy rating and $30.00 price target for shares of Cullinan Oncology Inc. (NASDAQ:CGEM), highlighting the recent deal between GSK (LON:GSK) and Chimagen as indicative of the pharmaceutical industry's interest in B-cell depleting T-cell engagers (TCEs) for immunology and inflammation (I&I) applications. The analyst pointed out that GSK's acquisition of a trispecific CD19xCD20xCD3 TCE from Chimagen for $300 million upfront, with the possibility of $550 million in additional milestones, underscores the value of such therapies.
The firm emphasized the premium likely to be placed on acquisition targets like Cullinan Oncology, which has US-generated clinical data. Cullinan's Phase 1 trial for Systemic Lupus Erythematosus (SLE) began earlier in October in the United States. The analyst suggested that this could position the company favorably compared to programs outside the US, such as Chimagen's TCE CMG1A46, which is slated to start a Phase 1 lupus trial in 2025.
BTIG commented on the potential advantages of Cullinan's CLN-978 over Chimagen's CMG1A46, noting that the former is a CD19xCD3 TCE, and targeting CD19 alone could be as effective as a multispecific approach. Furthermore, based on non-human primate (NHP) data, CLN-978 is expected to have a longer half-life and potentially less frequent dosing compared to CMG1A46. The larger size of CMG1A46 could also mean lower bioavailability in target tissues, which would favor CLN-978's efficacy.
Lastly, the analyst mentioned that CMG1A46 is currently administered via intravenous (IV) infusion in ongoing leukemia and lymphoma trials without apparent plans for a subcutaneous (SC) formulation. This could be seen as a disadvantage if CMG1A46 does not demonstrate a clear efficacy advantage. BTIG views the recent acquisition as a positive sign for the sector and believes that CLN-978 has distinct opportunities to differentiate itself in the market.
In other recent news, Cullinan Oncology has made significant strides in its clinical trials and drug development. UBS initiated coverage on the company's stock, issuing a Buy rating based on the potential of Cullinan's leading program, CLN-978. The firm estimates its risk-adjusted peak revenue at approximately $1.6 billion, surpassing the consensus estimate of about $1.1 billion.
Furthermore, Cullinan Oncology received FDA approval for its Investigational New Drug (IND) application for CLN-978, a potential treatment for systemic lupus erythematosus (SLE). Analyst firms H.C. Wainwright and BTIG reaffirmed their Buy ratings for the company, with price targets of $28 and $30 respectively.
Morgan Stanley (NYSE:MS) maintained an Overweight rating for the company. In addition, Cullinan reported a lower-than-expected Q1 loss of $0.86 per share, beating the projected loss of $0.94.
The company also presented promising clinical trial data for its drug zipalertinib, demonstrating a 40% objective response rate in treating non-small cell lung cancer. Lastly, Cullinan Oncology welcomed Mary Kay Fenton as its new Chief Financial Officer and elected Anne-Marie Martin, Ph.D., and David Meek as Class I directors to the Board.
InvestingPro Insights
Adding to BTIG's optimistic outlook on Cullinan Oncology Inc. (NASDAQ:CGEM), recent data from InvestingPro provides further context to the company's financial position and market performance. Despite the company's current lack of profitability, with an adjusted operating income of -$183.3 million over the last twelve months, Cullinan Oncology has demonstrated remarkable market resilience. The stock has shown a significant 1-year price total return of 91.58%, outperforming many of its peers in the biotechnology sector.
InvestingPro Tips highlight that Cullinan Oncology holds more cash than debt on its balance sheet, which is crucial for a biotech company investing heavily in research and development. This strong liquidity position is further supported by the fact that the company's liquid assets exceed its short-term obligations, providing financial flexibility to continue its clinical trials and development programs.
While analysts do not anticipate the company to be profitable this year, the stock's high return over the last year suggests investor confidence in Cullinan's pipeline and potential. This aligns with BTIG's positive stance on the company's CLN-978 program and its potential advantages in the competitive landscape of T-cell engagers for immunology and inflammation applications.
For investors seeking a deeper understanding of Cullinan Oncology's prospects, InvestingPro offers 8 additional tips that could provide valuable insights into the company's financial health and market position.
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