On Tuesday, Stifel adjusted its price target for Cue Biopharma (NASDAQ:CUE) shares, reducing it to $4.00 from the previous $8.00. Despite the significant cut in the target, the firm maintains a Buy rating on the company's stock.
The revision in the price target reflects a strategic shift by Cue Biopharma's management, which has decided to pause the development of their CUE-101/102 programs to increase focus on autoimmune disease (AID) treatments.
This decision is influenced by promising preclinical data from their Ono-partnered CUE-401 program and preliminary data from CUE-501, which has shown potential in B cell depletion through a CD19-targeting scaffold.
Stifel's commentary highlighted the growing strategic interest in the AID space, suggesting that Cue Biopharma's near-term strategy hinges on securing non-dilutive or strategic funding. This would likely involve a collaboration specifically for CUE-501 and achieving development milestones related to CUE-401.
While the firm acknowledges the proof-of-concept established by CUE-101 in combination with pembrolizumab for treating HPV-positive squamous cell carcinoma of the head and neck (SCCHN), it notes the high threshold for attracting strategic partners based on the current phase 1 overall survival data.
The new price target of $4 takes into account the delayed commercialization timeline for CUE-101, now projected for fiscal year 2030, and revised financing assumptions. However, these are partially mitigated by expected lower operating expenses beyond fiscal year 2025.
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