BTIG starts Cue Biopharma at buy; PT $26

BTIG launched coverage of Cue Biopharma (NASDAQ:CUE) with a “buy” rating and $26 price target. The stock closed at $15.51 on Jan. 27.

Cue Biopharma exploits signals naturally provided by dendritic cells (DCs) to activate specific T-cells in the Immuno-STAT framework that replaces the need for the DCs, a complex and incompletely understood family of antigen-presenting cells. 

“Data to date are preclinical but the lead program, CUE-101, has exploited well defined subunits and demonstrated tumor antigen-specific T-cells responses without the accompanying systemic immune toxicities that characterize many competing approaches,” writes analyst Thomas Shrader. 

The Immuno-STAT approach has already resulted in $12.5-million in partnership funding with up to $770-million future milestones. The company is exploring oncology, chronic infectious disease, and autoimmune indications and has its first oncology-based asset in the clinic, CUE-101. 

Cue’s technology has attracted partners like Merck and South Korea’s LG Chem. “The Merck collaboration seems critical to move the Immuno-STAT framework beyond oncology into the more subtle autoimmune area via molecules that specifically turn off disease causing T-cells,” Mr. Shrader said.

The first clinical readout of the CUE-101 Phase 1 trial is expected in the second half of 2020. The drug candidate is currently being evaluated as a second or later line monotherapy option for HPV-16 driven recurrent/metastatic head and neck squamous cell cancer in patients with HLA-A02:01 serotype.