BioTuesdays

Cantor starts Eledon Pharma at OW; PT $25

Cantor Fitzgerald launched coverage of Eledon Pharmaceuticals (NASDAQ:ELDN) with an “overweight” rating and $25 price target. The stock closed at $13.65 on March 22.

Eledon is focused on developing AT-1501, which is an anti-CD40L antibody for treating autoimmune indications as well as amyotrophic lateral sclerosis (ALS). AT-1501 is currently being investigated in four Phase 2 trials: renal transplantation, islet cell transplantation, autoimmune nephritis, and AML.

Analyst Alethia Young writes that CD40/CD40L biology is fairly de-risked, as “we have seen clinical activity from CD40 assets, which gives us confidence in the target. We think that AT-1501 has been enhanced to have better potency than earlier anti-CD40 therapies, and we think that blocking the ligand, the mechanism of action of AT-1501, has particular advantages over the receptor.”

Ms. Young said Eledon’s strategy to study AT-1501 in four distinct indications early in clinical development “best sets it up for clinical success.” She pointed out that Novartis’ iscalimab anti-CD40 antibody showed clinical activity in kidney transplantation, which is one of Eledon’s indications.

At the company’s current market cap of about $208-million, “we think the stock is under the radar. However, with most of the clinical studies in the four indications beginning during 2021, “we think that this positions the company for major stock-moving inflection points over the next 12-to-15 months,” Ms. Young said.

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