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On Monday, H.C. Wainwright analyst Robert Burns revised the price target for Caribou Biosciences Inc. (NASDAQ:CRBU) shares, reducing it to $3.00 from the previous $9.00. Despite the significant decrease, the analyst maintained a Buy rating on the stock. According to InvestingPro data, the stock has seen significant volatility, falling nearly 80% over the past year, with analyst targets ranging from $1 to $32.
Last week, Caribou Biosciences announced a strategic shift to concentrate resources on its leading oncology clinical programs. This change in strategy involves halting the Phase 1 GALLOP and AMpLify trials. The GALLOP trial was assessing CB-010 in lupus nephritis (LN) and extrarenal lupus (ERL) patients, while the AMpLify trial was for CB-012 in relapsed or refractory acute myeloid leukemia (AML). As part of the reorganization, the company also plans to reduce its workforce by approximately 32%. InvestingPro analysis shows the company maintains a strong current ratio of 7.16, with more cash than debt on its balance sheet, though it’s currently burning through cash rapidly.
This re-prioritization is expected to extend Caribou’s financial runway, with management now projecting that their approximately $212.5 million in funds as of the end of the first quarter of 2025 will last into the second half of 2027, a shift from the previously anticipated second half of 2026. With a market capitalization of just $72 million and an EBITDA of -$158 million in the last twelve months, the company’s financial health score is currently rated as ’Weak’ by InvestingPro, which offers 12 additional key insights about the company’s performance and prospects.
In response to Caribou’s strategic changes, H.C. Wainwright adjusted their financial model for the company. The modifications include an increase in the discount rate from 10% to 11%, a decrease in the projected terminal growth rate from 2% to 1%, and a reduction in the probability of approval for CB-011 in relapsed/refractory multiple myeloma from 20% to 15%. These updates underpin the analyst’s decision to reiterate a Buy rating while lowering the 12-month price target. The company’s next earnings report is scheduled for May 13, 2025, which could provide further clarity on its strategic direction.
In other recent news, Caribou Biosciences reported a narrower-than-expected loss for the fourth quarter of 2024, posting a loss of $0.39 per share, which was better than analyst estimates of a $0.42 per share loss. Revenue for the quarter was $2.08 million, slightly below the consensus estimate of $2.12 million and a decrease from $3.6 million in the same quarter the previous year. The company ended 2024 with $249.4 million in cash, cash equivalents, and marketable securities, projected to fund operations into the second half of 2026. Caribou Biosciences also announced strategic changes, including workforce reductions and a focus on two key oncology programs, CB-010 and CB-011, to extend its cash runway into the second half of 2027. The company is discontinuing trials for lupus and acute myeloid leukemia, as well as ceasing preclinical research efforts. Clinical data from the CB-010 and CB-011 Phase 1 trials are expected to be released in the second half of this year. The company reported a full-year 2024 net loss of $149.1 million, wider than the $102.1 million loss in 2023, primarily due to increased research and development expenses. These developments reflect Caribou’s strategic focus on advancing its lead oncology programs.
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