Guggenheim cuts Century Therapeutics target to $5, keeps Buy rating

Friday, shares of Century Therapeutics (NASDAQ:IPSC) witnessed a change in their price target as Guggenheim analysts adjusted their expectations. The firm has lowered the price target on the stock to $5.00 from the previous $12.00, while maintaining a Buy rating. Currently trading at $0.55, the stock sits well below the analyst consensus range of $2.00 to $11.00. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value assessment.

The revision follows Century Therapeutics’ announcement of their fiscal year 2024 results and a strategic update, which included a re-prioritization of their development pipeline. A significant development was the discontinuation of the CNTY-101 drug in the ELiPSE-1 trial for relapsed/refractory non-Hodgkin lymphoma (r/r NHL), a move that was anticipated by market observers, with no value for this program currently reflected in the stock price. The company, with a market capitalization of $47.3 million, has shown strong revenue growth of 195% in the last twelve months, though InvestingPro data indicates a weak overall financial health score.

In the immunology and inflammation (I&I) segment, Century Therapeutics confirmed the enrollment of the first patient in the Phase I CALiPSO-1 trial of CNTY-101 for autoimmune diseases. The company has plans to commence dosing later this month.

Guggenheim’s analysts have updated their financial model to incorporate the latest updates from the pipeline. Despite the reduction in the price target, the analysts reiterated their Buy rating. They believe that Century Therapeutics remains a distinct entity in the short-term market for autoimmune therapies and positions itself as a leader in iPSC-derived cell therapies for the long term.

In other recent news, Century Therapeutics has announced a partnership with Friedrich-Alexander University Erlangen-Nürnberg for a Phase 1/2 trial of its investigational cell therapy, CNTY-101, targeting autoimmune diseases. This trial, named CARAMEL, aims to evaluate the safety and efficacy of the therapy in patients with conditions like systemic lupus erythematosus and lupus nephritis. Meanwhile, Century Therapeutics received a deficiency warning from Nasdaq due to its share price falling below the $1.00 minimum requirement, with a compliance deadline set for August 25, 2025. The company is exploring strategies to address this issue and maintain its Nasdaq listing.

Piper Sandler has adjusted its price target for Century Therapeutics, lowering it to $4 from $12, while maintaining an Overweight rating. This adjustment follows the company’s promising Phase I ELiPSE-1 data, where CNTY-101 achieved an 83% overall response rate in B cell lymphoma patients. However, Century faced a setback as Bristol-Myers Squibb (NYSE:BMY) ended its collaboration on developing therapies for acute myeloid leukemia and multiple myeloma. Despite these challenges, Century ended the third quarter of 2024 with a robust cash position of $245 million, as it continues to review its preclinical pipeline.

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