Stifel launched coverage of Selecta Biosciences (NASDAQ:SELB) with a “buy” rating and $23 price target. The stock closed at $14 on Friday.
“Selecta’s SVP-Rapamycin technology has the potential to open the doors of immunological tolerance and allow patients to be treated with recombinant protein ‘creations’ designed to combat disease,” writes analyst Thomas Shrader.
Examples are already in use and include viral vectors with ideal tropism and replacement enzymes with supercharged catalytic activities, he added.
A replacement uricase enzyme for refractory gout called, pegsiticase, is Selecta’s first clinical program. Mr. Shrader said uricase enzyme replacement therapies have shown remarkable abilities to reduce uric acid in serum and tissue deposits, but these non-human enzymes are extremely immunogenic.
“Using SVP-Rapamycin, Selecta hopes to tolerize patients to pegsiticase, and create a gout treatment that can function for the life of the patient,” he said.
Data in humans suggests that a single dose of SVP-Rapamycin inhibits completely the formation of anti-drug antibodies for over 30 days. Results from multi-dose studies are due in mid-2017 and likely represent a major value inflection point for the stock, he added.
Regarding food allergies, Mr. Shrader said Selecta’s approach has the potential to induce tolerance more quickly and possibly to much higher levels of life-threatening food proteins. Three programs are partnered with Sanofi and each contains up to $300-million in milestones and potential royalties.
