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William Blair initiated coverage of Contineum Therapeutics (NASDAQ:CTNM) with an outperform rating and a fair value of $23.26 per share, significantly above the current trading price of $3.65. The clinical-stage biotech company, which has seen its stock decline nearly 80% over the past year according to InvestingPro data, is developing small-molecule therapeutics for neuroinflammation and immunology indications.
Contineum’s lead candidate, PIPE-791, is a CNS-penetrant LPAR1 antagonist being developed for idiopathic pulmonary fibrosis (IPF), progressive forms of multiple sclerosis, and chronic pain. Data from a Phase Ib trial assessing pharmacokinetics and LPAR1 occupancy is expected later in the second quarter, which will inform dose selection for future Phase II studies. InvestingPro analysis shows the company maintains a strong liquidity position with a current ratio of 21.47, though it’s currently burning through cash rapidly.
William Blair ascribes approximately 70% of its fair value estimate to PIPE-791 in IPF, noting that investment from large pharmaceutical companies in similar pathway-targeting assets serves as a de-risking factor. The firm highlighted that PIPE-791 could have a competitive advantage if it maintains the clean safety profile demonstrated in Phase I trials, unlike Bristol Myers (NYSE:BMY) Squibb’s admilparant which showed efficacy but had hypotension concerns.
The company’s second candidate, PIPE-307, an M1 muscarinic receptor antagonist, is licensed by Johnson & Johnson. Data from the Phase II VISTA trial as an adjunctive treatment in relapsing MS is expected in the second half of 2025, which William Blair considers the largest near-term catalyst for Contineum.
Johnson & Johnson is also evaluating PIPE-307 in a Phase II study for major depressive disorder, which could represent Contineum’s first commercial opportunity. The firm noted that Boehringer Ingelheim’s Ofev generated $3.9 billion in 2024 sales, indicating a large market opportunity for new IPF treatments.
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