SVB Leerink starts Elevation Oncology at OP; PT $20

SVB Leerink launched coverage of Elevation Oncology (NASDAQ:ELEV) with an “outperform” rating and $20 price target. The stock closed at $12.10 on July 19.

Elevation is a clinical development-stage biotech company focused on targeted therapeutics in genomically-defined patient populations. 

The company’s lead asset, seribantumab, a HER3 monoclonal antibody, has the “potential to be a best-in-class asset for neuregulin 1 (NRG1) fusion protein-positive non-small cell lung cancer (NSCLC) by optimizing target occupation and inhibition,” writes analyst Andrew Berens, M.D. NRG1 is a gene of the epidermal growth factor family.

Management has also suggested potential expansion opportunities into the HER3 mutant space and as the foundation for an antibody-drug conjugate, he added.

Dr. Berens said the company also plans to expand its pipeline by leveraging an expertise in precision oncology and a recent partnership with Caris Life Sciences, a molecular diagnostics company, to identify promising pipeline candidates. 

Dr. Berens currently attribute about $10/share for NRG1+ NSCLC; about $2/share for NRG1+ pancreatic cancer; about $3/share for the potential NRG1+ tumor agnostic opportunity; and about $4/share in potential seribantumab expansion opportunities, leading to his $20 price target. 

“We do not assign value to Elevation’s pipeline development strategy, which could be a key driver of shares should a compelling target emerge,” he added.