Stifel Lowers Cue Biopharma (CUE) Price Target to $4, Maintains Buy Rating Amid Strategic Shift
In a recent update, Stifel revised its price target for Cue Biopharma (NASDAQ: CUE) shares, lowering it to $4.00 from $8.00. Despite this adjustment, the firm continues to maintain a Buy rating on the company's stock.
The decision to reduce the price target comes as Cue Biopharma's management announces a strategic shift in focus towards autoimmune disease (AID) treatments, pausing the development of their CUE-101/102 programs. This change is backed by promising preclinical data from the Ono-partnered CUE-401 program and preliminary results from CUE-501, showing potential in B cell depletion through a CD19-targeting scaffold.
Stifel's analysis underscores the increasing interest in the AID space and suggests that Cue Biopharma's immediate strategy relies on securing non-dilutive or strategic funding. This could involve collaborations specifically for CUE-501 and achieving development milestones related to CUE-401.
While recognizing the proof-of-concept demonstrated by CUE-101 in combination with pembrolizumab for HPV-positive squamous cell carcinoma of the head and neck (SCCHN), Stifel notes the challenge of attracting strategic partners based on current phase 1 overall survival data.
The adjusted price target of $4 factors in the delayed commercialization timeline for CUE-101, now projected for fiscal year 2030, and revised financing assumptions. However, lower operating expenses expected beyond fiscal year 2025 help offset these concerns.
In conclusion, investors should take note of Cue Biopharma's strategic shift towards AID treatments and the implications for its future development and financial performance. While the revised price target reflects near-term challenges, the company's focus on promising programs and potential collaborations could drive long-term growth and value creation.