Clear Street sets Cargo Therapeutics at Buy with $28 target

On Thursday, Clear Street initiated coverage on Cargo Therapeutics (NASDAQ:CRGX), assigning a Buy rating with a price target set at $28.00. The firm's target aligns with the broader analyst consensus, as InvestingPro data shows analyst targets ranging from $28 to $34, suggesting significant upside potential from the current price of $15.61.

The firm expressed optimism regarding the company's leading drug candidate, Firi-cel, citing its superior efficacy compared to existing treatments for B-cell malignancies. The anticipation of forthcoming interim results from a pivotal trial was highlighted as a key factor that could drive the stock's potential upside.

The analyst from Clear Street underscored the blockbuster potential of Firi-cel, estimating peak sales to reach approximately $2.1 billion. This forecast is based on the drug's performance, which has been deemed to surpass that of currently available drugs for B-cell malignancies.

The significant market opportunity for Firi-cel is a primary reason for the positive outlook on Cargo Therapeutics' stock, which currently maintains a strong balance sheet with more cash than debt and a healthy current ratio of 18.95, according to InvestingPro analysis.

Cargo Therapeutics has been closely watched by investors as it approaches the release of interim results from its pivotal trial. With a market capitalization of $753 million and a year-to-date decline of 29%, investors seeking deeper insights can access additional financial metrics and 8 more exclusive ProTips through InvestingPro. The trial's outcomes are expected to provide critical data that could impact the drug's path to market and, consequently, the company's financial prospects. The analyst's mention of the "imminent pivotal trial (interim) results" indicates that the findings will soon be available for review.

The Buy rating and $28 price target suggest that Clear Street sees considerable value in Cargo Therapeutics at its current market position. The target implies a level of confidence in the company's growth trajectory, supported by the potential success of its lead drug candidate.

In other recent news, Cargo Therapeutics has seen significant advancements in its clinical trials and strategic operations. The company's pivotal FIRCE-1 trial for firi-cel reported a substantial increase in patient enrollment and a manufacturing success rate over 95%. The Phase I trial of firi-cel demonstrated a complete response rate of 53% and a median overall survival of 25.7 months. Analyst firms TD Cowen and Piper Sandler have maintained their positive ratings on the company's stock.

Cargo Therapeutics is also progressing with its CRG-023 therapy, currently in the investigational new drug-enabling studies phase. The company secured approximately $110 million from a private investment, supporting the preparation of a Biologics License Application for the FIRCE-1 study and further development of the CRG-023 program. Additionally, Cargo Therapeutics has entered a sublease agreement with Vaxcyte, Inc., to maximize the utility of its headquarters in San Carlos, California.

Piper Sandler has reaffirmed its Overweight rating based on research supporting the safety profile of CAR-T therapies. The firm anticipates that CAR-T therapies will continue to advance into earlier treatment stages for large B-cell lymphoma and multiple myeloma. Lastly, Cargo Therapeutics announced the appointment of Dr. Kapil Dhingra, an experienced medical oncologist, to its Board of Directors.

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