On Thursday, Piper Sandler initiated coverage on shares of Cargo Therapeutics (NASDAQ:CRGX), assigning an Overweight rating with a price target of $37.00. The firm expressed optimism based on promising data from an early-stage clinical trial for CRG-022, Cargo's investigational therapy for certain types of lymphoma.
The positive outlook stems from the Phase 1 study conducted at Stanford, which indicated the durable efficacy of CRG-022, also known as firi-cel, in relapsed/refractory large B-cell lymphoma (r/r LBCL). Piper Sandler anticipates that the ongoing Phase 2 FIRCE-1 study will likely yield similar outcomes.
The interim analysis for the FIRCE-1 study is expected around the end of the first quarter or early in the second quarter of 2025. This upcoming milestone is a significant event that could enhance the company's value.
Piper Sandler also forecasts that Cargo Therapeutics may be able to apply for regulatory approval in the latter part of 2025, with the potential for market authorization to follow in 2026. Additionally, CRG-022 is recognized for its prospective use in earlier stages of LBCL and in relapsed/refractory acute lymphoblastic leukemia (r/r ALL), which could further extend its therapeutic reach.
In other recent news, clinical-stage biotechnology company CARGO Therapeutics has secured approximately $110 million in gross proceeds from a successful private investment in public equity (PIPE) financing. The funds will support the preparation of a Biologics License Application (BLA) for its Phase 2 study, FIRCE-1, of firicabtagene autoleucel (firi-cel) and further development of its CRG-023 program.
The financing involved the sale of approximately 6.47 million shares of common stock at $17 per share, with participation from investors such as EcoR1 Capital, Woodline Partners LP, and T. Rowe Price Associates.
In addition to the financing news, Truist Securities adjusted its price target for CARGO Therapeutics to $32 from $34, maintaining a Buy rating on the company's stock. This follows the company's announcement of its Q1 2024 results, which included updates on its financial guidance and clinical study progress.
CARGO Therapeutics also recently announced the appointment of Dr. Kapil Dhingra, a medical oncologist with over 25 years of experience, to its Board of Directors. Dr. Dhingra's appointment comes as the company advances its lead CAR T-cell therapy candidate, firi-cel (CRG-022). These are among the latest developments for CARGO Therapeutics as it continues to focus on the development of next-generation cell therapies for cancer treatment.
InvestingPro Insights
Piper Sandler's initiation of coverage on Cargo Therapeutics with a bullish stance is worth considering alongside the company's financial health and market performance. According to InvestingPro data, Cargo Therapeutics holds a market capitalization of $574.89 million, suggesting a moderate size within the biotech industry. Despite the company's potential in clinical advancements, it's important to note that it has been quickly burning through cash and has weak gross profit margins, as indicated by InvestingPro Tips. Additionally, the company's P/E ratio stands at -2.06, reflecting its lack of profitability in the recent past, which is further underscored by an adjusted P/E ratio for the last twelve months as of Q1 2024 at -4.74.
Investors should be aware that analysts do not expect the company to be profitable this year, and the stock has experienced a significant decline over the last month, with a 30.01% drop in price total return. The lack of dividend payments might also be a consideration for income-focused investors. However, Cargo Therapeutics does have liquid assets that exceed its short-term obligations, which could provide some level of financial stability in the near term.
For those looking to delve deeper into Cargo Therapeutics' financials and market performance, additional InvestingPro Tips are available on the platform. Readers interested in a comprehensive analysis can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. This could provide valuable insights, especially as the company approaches its next earnings date on August 28, 2024, and as investors await interim analysis results for the FIRCE-1 study.
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