Citi sets $25 target on Candel Therapeutics stock with Buy rating

On Thursday, Citi began coverage of Candel Therapeutics Inc. (NASDAQ:CADL) with a positive outlook, assigning a Buy rating and setting a price target of $25.00. The initiation comes in the wake of Candel’s lead asset, CAN-2409, showing promising results in the treatment of localized prostate cancer. The company, currently valued at $448 million, has seen its stock surge over 500% in the past year. According to InvestingPro data, the stock appears overbought based on technical indicators, though analysts maintain bullish targets between $15 and $20.

Candel Therapeutics is focused on the development of viral-based, intra-tumoral immunotherapies for solid tumors. Citi’s analysis suggests that CAN-2409 has the potential to significantly extend median Disease-Free Survival (mDFS) in localized prostate cancer by approximately 8-9 years when compared to radiotherapy alone. Despite the stock’s recent gains, including a 99% increase over the past six months, Citi sees further potential for appreciation. InvestingPro analysis shows the stock typically moves counter to broader market trends, with a beta of -1.24, offering potential portfolio diversification benefits.

The company’s timeline anticipates a Biologics License Application (BLA) filing for CAN-2409 in the fourth quarter of 2026, which factors in the time required for commercial scale-up. However, Candel is expected to reveal additional near-term catalysts in the first quarter of 2025, including final Phase 2 Overall Survival (OS) data in Non-Small Cell Lung Cancer (NSCLC) and Pancreatic Ductal Adenocarcinoma (PDAC). The initial data from these trials have already shown encouraging results, surpassing the standard of care with median OS of approximately 21 and 29 months, respectively. With the next earnings report due on March 27, investors can access comprehensive financial analysis and 12 additional ProTips through InvestingPro.

In addition to CAN-2409, Candel is advancing its second program, CAN-3110, which is currently in a Phase 1b trial targeting recurrent high-grade glioma (rHGG). Although this program is at an earlier stage, positive outcomes could potentially lead to a registrational trial, with an update on Overall Survival expected in the fourth quarter of 2025.

Citi’s bullish stance on Candel Therapeutics is underpinned by the company’s robust pipeline and the significant clinical milestones expected in the near future. The firm’s analysts have high expectations for the company’s innovative approach to cancer treatment, and the $25.00 price target reflects their confidence in Candel’s potential for growth in the biotech sector.

In other recent news, Candel Therapeutics has reported successful results from a critical Phase 3 clinical trial of its viral immunotherapy, CAN-2409, for treating localized prostate cancer. The trial, involving 745 participants, achieved its primary endpoint by demonstrating a statistically significant improvement in disease-free survival when CAN-2409 was used in combination with standard therapies. Following these promising results, H.C. Wainwright upgraded Candel Therapeutics’ stock, raising the price target from $11.00 to $19.00 and maintaining a Buy rating. This upgrade reflects increased confidence in the potential regulatory approval of CAN-2409, with the likelihood of approval now estimated at 85%.

Additionally, Candel Therapeutics has announced a public offering aimed at raising approximately $80 million, with the sale of 10 million shares of common stock at $6.00 each. The offering also includes pre-funded warrants for over 3.3 million shares. The proceeds from this offering are expected to support the development of Candel’s product candidates, including preparing a Biologics License Application for CAN-2409. Citigroup (NYSE:C), BofA Securities, and Canaccord Genuity are among the joint bookrunning managers for this offering.

The recent clinical trial results have sparked significant interest, with CAN-2409 showing a 14.5% relative improvement in disease-free survival at 54 months. Candel Therapeutics plans to engage with the FDA to discuss the regulatory pathway for CAN-2409, aiming for approval as a new treatment option for prostate cancer.

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