Lucid Capital Markets initiates Lyell Immunopharma stock with Buy rating

Investing.com - Lucid Capital Markets initiated coverage on Lyell Immunopharma (NASDAQ:LYEL) with a Buy rating and a $20.00 price target on Friday. According to InvestingPro data, the company maintains a strong financial position with more cash than debt and a healthy current ratio of 7.65x.

The research firm views Lyell as a clinical-stage biotechnology company developing potential curative cell therapies for cancer patients, with an estimated non-risk adjusted peak sales potential of approximately $2.2 billion by 2039 for its lead asset ronde-cel. While the company is currently burning through cash rapidly, InvestingPro analysis shows its liquid assets exceed short-term obligations, providing runway for development.

Lucid Capital Markets notes that ronde-cel, a CD19/20 CAR T-cell therapy being evaluated in diffuse large B-cell lymphoma (DLBCL), faces a competitive market but believes there is room for multiple treatments given the size of the opportunity. The stock has shown strong momentum with a 14% return over the past six months, though analysts expect sales to decline in the current year.

The firm identifies several catalysts for LYEL shares over the next 12-18 months, including more mature second-line data and ongoing trial progress updates in third-line and beyond LBCL expected in late 2025.

In its valuation model, Lucid Capital Markets assigns a 55% probability of success for ronde-cel in third-line and beyond DLBCL and 35% for second-line DLBCL, with ronde-cel contributing $18 per share to the price target and the company’s pipeline and platform adding another $2 per share.

In other recent news, Lyell Immunopharma , Inc. announced it has entered into a securities purchase agreement with institutional and accredited investors. This private placement could potentially raise up to approximately $100 million for the company. Lyell Immunopharma expects an initial closing of approximately $50 million of common stock at $13.32 per share. The closing is anticipated to occur around July 25, 2025, pending customary closing conditions. These developments come as the company continues its efforts in advancing next-generation CAR T-cell therapies. Investors will be watching closely as Lyell Immunopharma moves forward with this financial strategy. The infusion of capital is expected to support the company’s ongoing clinical-stage projects.

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