BioTuesdays

Cantor starts Corvus Pharma at OW; PT $10

Corvus Pharmaceuticals

Cantor Fitzgerald launched coverage of Corvus Pharmaceuticals (NASDAQ:CRVS) with an “overweight” rating and 12-month price target of $10. The stock closed at $2.66 on May 26.

“We believe that the risk/reward profile is very compelling at this level, with potential catalysts coming in the second half of 2021,” writes analyst Li Watsek.

Corvus is a clinical stage company that is focused on immunological targets to treat COVID-19, T-cell lymphomas, renal cell cancer, and other types of cancers and autoimmune diseases. 

The company’s lead program, CPI-006, is an anti-CD73 antibody in a Phase 3 stage for the treatment of hospitalized COVID-19 patients, that is on track to generate interim data by year-end, top-line data in early 2022 and a potential launch in the second half of 2022, Ms. Watsek said. “We think CPI-006 has a very differentiated mechanism of action that sets it apart from other approaches.” 

In addition, she said the company has two programs – CPI-818 and ciforadenant –  that are advancing into Phase 2 programs by mid-year in T-cell lymphoma, and front-line renal cell carcinoma, respectively. “We believe that both will generate proof-of-concept data in 2022.” Ms. Watsek said. 

“Given the stage of these programs, we think the stock is substantially undervalued compared to peers at the current market capitalization of about $100-million, with pro-forma cash of $78-million, which implies almost no credit to the pipeline,” she added. 

Ms. Watsek is forecasting that the COVID-19 program could bring in close to $100-million in revenue by 2024. “We believe the potential catalysts in the next 12-to-18 months would drive significant value if even just one of the programs hits,” she said. “Over the longer term, we also think all these assets have the potential to address much broader indications leading to greater upside optionality.”