On Monday, Carisma Therapeutics Inc (NASDAQ: CARM) retained a favorable outlook from D. Boral (OTC:BOALY) Capital, with the firm reiterating its Buy rating and a $24.00 price target for the biotechnology company's stock. The positive stance is based on the potential of Carisma's product candidate 0525 in treating HER2 Breast Cancer (BC).
The analyst at D. Boral Capital has applied a modest 30% probability of success to the treatment's prospects and used a 30% discount rate in the financial models. The firm's valuation also assumes that Carisma Therapeutics will seek additional capital, which has been factored into the projected share count.
The $24.00 price target is derived from an average of the results of three valuation models: Free Cash Flow to the firm (FCFF), discounted EPS (dEPS), and sum-of-the-parts (SOP). These models have been equal-weighted and the results rounded to the nearest whole number to arrive at a 12-month price target of $12.00.
In addition to the direct valuation from the models, D. Boral Capital has added a significant $12.00 of value attributed to the company's technology platform.
The rationale behind this additional valuation is that success in BC could validate the CAR-M platform, which would have broad implications for Carisma Therapeutics, at least equating the opportunity in Breast Cancer. This leads to a combined valuation of $24.00 per share for Carisma Therapeutics.
In other recent news, Carisma Therapeutics Inc. has made significant strides in the development of its innovative in vivo CAR-M therapy, targeting hepatocellular carcinoma, a common form of liver cancer.
This progress comes as a result of a collaboration with Moderna (NASDAQ:MRNA), Inc. The pre-clinical data shows potential for the treatment to effectively target GPC3 tumor antigens and inhibit metastasis to the liver.
In addition to its therapy development, Carisma has seen changes in its board and advisory team. Sohanya Cheng, an industry veteran with significant oncology experience, has joined the Board of Directors, while Michael Torok has resigned. The company also expanded its Scientific Advisory Board with the appointment of liver fibrosis experts, Dr. Scott Friedman and Dr. Ira Tabas.
On the analyst front, Carisma received a Buy rating from EF Hutton, while H.C. Wainwright maintained a Buy rating, Evercore ISI maintained an Outperform rating, and BTIG initiated coverage with a Buy rating.
However, the company has been notified by the Nasdaq Stock Market of a potential delisting due to its market value falling below the required threshold, triggering a 180-day period to regain compliance. These are the recent developments for Carisma Therapeutics.
InvestingPro Insights
While D. Boral Capital maintains a bullish outlook on Carisma Therapeutics Inc (NASDAQ: CARM), recent financial data from InvestingPro paints a more nuanced picture of the company's current position. As of the last twelve months ending Q3 2024, Carisma reported revenue of $20.27 million, with a substantial year-over-year growth of 41.13%. This growth aligns with the optimistic view of the company's potential in the biotechnology sector.
However, investors should note that Carisma is currently operating at a loss, with an adjusted operating income of -$66.77 million and an operating income margin of -329.46%. This aligns with an InvestingPro Tip indicating that the company is not profitable over the last twelve months. Another InvestingPro Tip highlights that Carisma is quickly burning through cash, which is a common characteristic of biotechnology companies in the development stage.
Despite these challenges, Carisma's balance sheet shows some strength. An InvestingPro Tip notes that the company holds more cash than debt, which could provide some financial flexibility as it continues to develop its product candidates. This financial cushion may be crucial as the company progresses with its HER2 Breast Cancer treatment and seeks to validate its CAR-M platform.
For investors considering Carisma Therapeutics, it's worth noting that InvestingPro offers 7 additional tips that could provide further insights into the company's financial health and market position. These additional tips, available with an InvestingPro subscription, could be valuable for making informed investment decisions in the volatile biotechnology sector.
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