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Investing.com - Guggenheim has reduced its price target on Cabaletta Bio Inc . (NASDAQ:CABA) to $15 from $25 while maintaining a Buy rating, citing share dilution from the company’s recent capital raise. According to InvestingPro data, analyst targets for CABA currently range from $3 to $25, with the stock showing significant volatility in recent months. The company’s shares have declined over 45% in the past six months, though InvestingPro analysis suggests the stock is currently undervalued.
The research firm adjusted its target following Cabaletta’s second-quarter results and a $100 million capital raise that extended the company’s cash runway into the second half of 2026. The price target reduction accounts for 50 million shares issued in a June offering and an additional 50 million warrants exercisable at $2.50. InvestingPro data reveals that while the company holds more cash than debt and maintains strong liquidity with a current ratio of 3.96, it’s rapidly burning through its cash reserves. Get access to 10+ additional ProTips and comprehensive financial analysis through InvestingPro’s detailed research reports.
Cabaletta remains on track to initiate its pivotal RESET-myositis program in the second half of 2025, which will include two open-label single-arm, disease-specific cohorts with approximately 15 patients each. The company anticipates a potential Biologics License Application filing in 2027 based on either cohort, if successful. While the company isn’t currently profitable, with a return on assets of -62.5%, it maintains a healthy balance sheet with liquid assets exceeding short-term obligations.
The biotech firm plans to present complete Phase I/II clinical data from the RESET-Myositis trial, initial dose data from the RESET-PV trial, and initial clinical data from the RESET-MG trial in the second half of 2025. Complete Phase I/II clinical data from the RESET-SLE and RESET-SSc trials are expected in the first half of 2026.
Cabaletta also plans to meet with the FDA to align on key registrational design elements for the RESET-SLE trial in the third quarter of 2025, the RESET-SSc trial in the fourth quarter of 2025, and the RESET-MG trial in the first half of 2026.
In other recent news, Cabaletta Bio announced the pricing of a public offering expected to raise approximately $100 million in gross proceeds. The offering includes 39.2 million shares of common stock and 10.8 million pre-funded warrants, each with accompanying warrants to purchase additional shares, priced at $2.00 per share. This development follows the company’s presentation of promising clinical data at the EULAR conference, where it showcased results from 18 patients treated with its rese-cel therapy for various autoimmune diseases. Seven out of eight patients in the REST-Myositis study showed clinical responses while reducing or stopping other treatments. Analysts have responded to these developments with mixed adjustments to their price targets. Jefferies lowered its price target for Cabaletta Bio to $14, citing the recent capital raise, but maintained a Buy rating. Cantor Fitzgerald reiterated its Overweight rating and $15 price target, expressing a positive outlook after recent meetings with the company. H.C. Wainwright also maintained a Buy rating, keeping its price target at $25, reflecting optimism about the clinical data presented.
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