SVB Securities initiated coverage of Selecta Biosciences (NASDAQ:SELB) with an “outperform” rating and $7 price target. The stock closed at 88 cents on June 3.
Selecta is a clinical-stage biotech company advancing its immune tolerance platform, ImmTOR, across three pillars of drug development strategy: biologic therapies, gene therapies and autoimmune therapies.
Analyst Joseph Schwartz writes that ImmTOR consists of rapamycin encapsulated in biodegradable nanoparticles and is designed to induce antigen-specific immune tolerance via co-administration with a target antigen to prevent the formation of anti-drug antibodies (ADAs), which are a common cause for loss of efficacy and adverse reactions.
“We view ImmTOR’s approach for mitigating ADAs as de-risked by early clinical data from SEL-212 and believe that the ability to tame the immune response from a notoriously immunogenic foreign enzyme and PEG moiety bodes well for ImmTOR’s clinical potential in combination with gene therapies and autoimmune therapies,” Mr. Schwartz said.
“We see near-term upside potential with lead candidate, SEL-212, for chronic refractory gout, which is out-licensed to Sobi, approaching its joint pivotal trial data readout in the first quarter of 2023 and gene therapy, SEL-302, for methylmalonic acidemia, initiating its Phase 1 trial in the second half of 2022, with data expected to be reported on a patient-by-patient basis,” he added.
Mr. Schwartz said that although Selecta shares are currently trading for less than $1, near net cash per share following a recent raise, “we see a low risk of de-listing based on the upcoming catalysts and surrounding rules.”
He said Selecta represents an “attractive buying opportunity for investors looking for an undervalued name with a low enterprise value, de-risked late-stage clinical candidate, near-term news flow and de-risked platform technology that supports long-term upside potential.”