On Wednesday, Stifel initiated coverage on Celcuity Inc (NASDAQ:CELC), assigning a Buy rating to the stock with a price target of $40. The firm highlighted the potential of Celcuity's gedatolisib, a pan-PI3K/mTOR inhibitor, for use in second-line hormone receptor-positive metastatic breast cancer (HR+ mBC). Stifel's assessment is based on the drug's promising phase 1 data and its ability to address a significant market gap in the second-line treatment landscape.
The company's gedatolisib is in development for patients who have progressed after a CDK4/6 inhibitor treatment. Despite the challenges of introducing an infused drug in a market that favors oral medications and targets known for toxicity, Stifel is optimistic. The firm points to the strong phase 1 results for gedatolisib, which showed double-digit progression-free survival (PFS) and low rates of treatment discontinuation.
Stifel's coverage notes that the current market for second-line HR+ mBC treatments is commercially crowded but not competitive, with no regimens offering more than 5.5 months of treatment benefit, except for alpelisib, which is limited by severe toxicity. The firm believes that the significant drop-off in treatment duration from first-line therapy to second-line therapy represents a major unmet need that Celcuity's gedatolisib could potentially address.
The report also mentions that the market for first-line treatments is estimated at $7 billion, while the second-line market is only $1 billion, underscoring the opportunity for growth if Celcuity's gedatolisib can replicate its phase 1 success in pivotal data expected in the second half of 2024. Stifel suggests that the company could significantly expand its market share in the second-line setting with its triplet therapy of gedatolisib combined with palbociclib and fulvestrant.
In summary, Stifel's positive outlook on Celcuity is rooted in the strength of gedatolisib's early data and the potential to fill a substantial treatment gap in the HR+ mBC market. The firm's $40 price target reflects confidence in the drug's blockbuster potential and its ability to transform the therapeutic landscape for patients with advanced breast cancer.
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