H.C. Wainwright launched coverage of Calithera Biosciences (NASDAQ:CALA) with a “buy” rating and $7 price target. The stock closed at $3.38 on Nov. 18.
Calithera is developing therapies that target cellular metabolic pathways. The company’s lead product, telaglenastat, is a first-in-class, small molecule, oral glutaminase inhibitor for the treatment of kidney cancer, or renal cell carcinoma (RCC).
Analyst Swayampakula Ramakanth writes that many cancer cells, including RCC, have altered metabolic profiles that make them dependent on glutamine for essential cellular functions, including the biosynthesis of lipids, nucleotides, and amino acids.
“Telaglenastat is designed to target this unique weakness of cancer cells and has demonstrated clinical efficacy as both monotherapy and combination therapy across several indications, including RCC, breast cancer, and colorectal cancer,” Mr. Ramakanth said.
“In our view, telaglenastat could become the new standard of care for RCC and has significant upside potential in additional indications as well,” he added.
Calithera is investigating telaglenastat in the Phase 3 CANTATA study, which compares telaglenastat plus cabozantinib combination therapy against cabozantinib alone for the treatment of refractory, clear-cell RCC. Topline results from the pivotal study are expected in the second half of 2020.
“Since cabozantinib monotherapy is currently the preferred treatment after progressing on immunotherapy, we believe that positive results could be a major catalyst for the stock,” Mr. Ramakanth said.
