SVB Leerink starts Eledon Pharma at OP; PT $34

SVB Leerink launched coverage of Eledon Pharmaceuticals (NASDAQ:ELDN) with an “outperform” rating and a $34 price target. The stock closed at $14.99 on Feb. 5.

Eledon is developing AT-1501, a potentially best-in-class, second generation, anti-CD40 ligand (CD40L) monoclonal antibody.

With an ongoing Phase 2 trial in amyotrophic lateral sclerosis, and additional Phase 2 trials planned to start in 2021 in renal transplant, islet cell transplant, and autoimmune nephritis, Eledon is “aiming to demonstrate AT-1501’s pipeline-in-a-product profile and broad applicability as a treatment for autoimmune diseases,” writes analyst Thomas Smith.

He said CD40:CD40L signaling plays a critical role regulating B-cell proliferation and T-cell activation, and antibody production, and is implicated in multiple autoimmune diseases. The central role of CD40:CD40L in adaptive immunity has attracted significant interest with multiple competitors developing their own internal programs targeting this pathway, he added.

“AT-1501 appears differentiated by its high binding affinity for CD40L, extended 26-day half-life, and potentially favorable safety profile that lead us to believe this agent has best-in-class potential,” Mr. Smith said.

With four proof-of-concept data readouts anticipated in 2022, he said Eledon is an attractive pure-play on the broad potential for CD40:CD40L in autoimmune diseases, with the “shares likely to benefit from both internal clinical data de-risking, as well as external validation that further bolsters enthusiasm for the class.”

Sign up for the BioTuesdays weekly newsletter

Get the latest news on the healthcare industry’s corporate and clinical developments, executive moves, and market updates. Every Tuesday, in your inbox.