SVB Leerink starts Spruce Biosciences at OP; PT $35


SVB Leerink launched coverage of Spruce Biosciences (NASDAQ:SPRB) with an “outperform” rating and $35 price target. The stock closed at $20.30 on Nov. 2

Spruce is a late-stage biotech company developing therapies for rare endocrine disorders with high unmet need. The company is building a portfolio around adrenocorticotropic hormone (ACTH)-mediated diseases with lead compound, tildacerfont, an oral, non-steroid, highly selective corticotropin-releasing factor 1 (CRF1) receptor antagonist, which “we believe has the potential to be best in class,” writes analyst Joseph Schwartz.

“Having been de-risked by their own data and Neurocrine Biosciences’ crinecerfont now in Phase 3, Spruce has the potential to serve the congenital adrenal hyperplasia (CAH) community, which has not seen advancements in over 50 years,” he added. “We believe that the two indications in pursuit — CAH and a subset of polycystic ovary syndrome — could each be about $1-billion opportunities and appeal to investors.”

Mr. Schwartz said that while he believes Spruce’s potential registrational Phase 2b studies could make tildacerfont the first drug to come to market for CAH in over 50 years, “we believe it could still be successful even as a second entrant because of the high unmet need, large market opportunity, and potentially best-in-class characteristics.”