Investing.com - Jefferies raised its price target on Allogene Therapeutics Inc. shares (NASDAQ:ALLO) to $10.00 from $6.00 while maintaining a Buy rating on the stock. The new target represents nearly 400% upside from the current stock price of $2.02, though still below the Street-high target of $14.
The firm cited interim trial data that exceeded expectations for the company's Cema-cell therapy. Jefferies noted the minimal residual disease-negative effect size was strong and safety data was encouraging for broad outpatient and community use.
The analyst firm sees a potential market opportunity of approximately $3 billion for the therapy. Allogene's treatment represents a first-in-class allogeneic CAR-T therapy for the community setting, which treats roughly 80% of cancer patients.
Jefferies increased its probability of success estimate to 65% from 45% in its updated model. The firm partially offset the increase with anticipated equity dilution from a future capital raise. An InvestingPro tip notes the company is quickly burning through cash, though it maintains a strong current ratio of 7.93 and holds more cash than debt on its balance sheet.
The price target adjustment reflects meaningful de-risking from the data readout, according to Jefferies. The firm expects positive momentum heading into event-free survival data releases.
In other recent news, Allogene Therapeutics Inc. has published preclinical data on its investigational allogeneic CAR T product, ALLO-329, in Nature Communications. The study highlighted the product's dual-targeting capability, aimed at addressing CD19+ B cells and CD70+ activated T cells in autoimmune diseases. Additionally, Allogene has announced a $175 million stock offering, pricing 87.5 million shares at $2.00 each, with the proceeds expected to be used for general corporate purposes.
Analyst firms have also reacted to Allogene's developments. H.C. Wainwright raised its price target for Allogene to $12, maintaining a Buy rating, following interim futility results from the Phase 3 ALPHA3 trial of its CD19-targeted CAR-T therapy, cema-cel. Bernstein increased its price target to $3.85, citing improved probability of success for cema-cel in treating large B-cell lymphoma. Lastly, Citizens raised its price target to $8.00, maintaining a Market Perform rating, based on promising interim analysis data from the same trial. These recent developments reflect ongoing interest and confidence in Allogene's therapeutic advancements.