Cantor starts Evelo Biosciences at OW; PT $28

Cantor Fitzgerald launched coverage of Evelo Biosciences (NASDAQ:EVLO) with an “overweight” rating and 12-month price target of $28. The stock closed at $16.08 on June 22.

Evelo is developing oral therapies derived from single strains of microbes that work by acting on the small intestinal axis, the largest part of the immune system. 

Analyst Kristen Kluska writes that the company has demonstrated robust efficacy and safety from lead product, EDP1815, across dermatologic conditions, psoriasis, and atopic dermatitis. 

“Based on Evelo’s current valuation, we don’t believe investors are fully appreciating the potential for these indications, especially considering that Evelo is initially focusing on mild-to-moderate patients who remain underserved,” Ms. Kluska said. 

“With multiple catalysts on the horizon over the next six months, including Phase 2 psoriasis data in the third quarter of 2021, we think it is a compelling opportunity,” she added.