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Morgan Stanley initiated coverage on Arcelx Inc. (NASDAQ:ACLX) on Thursday, giving the biotechnology company an “overweight” rating and setting a price target of $81.00 per share. This coverage builds on Arcellx’s promising Phase 1 data in multiple myeloma, demonstrating the potential for the best-in-class profile of the company’s CAR-T therapy in this late-stage indication. Preliminary Phase 2 data is expected in the second half of 2024.
Arcellx’s key asset, ddBCMA (also known as anito-cel), incorporates a patented D domain as an extracellular binding domain. This unique synthetic binding domain is at the heart of the company’s extensive platform and is believed to offer several advantages. These include high transduction efficiency and stability, which may enable best-in-class profiles and scalable manufacturability for therapeutics.
Morgan Stanley analysis shows that the differentiated design of Arcellx’s D domain could give the company’s BCMA-targeted CAR-T therapy an advantage over competitors in terms of efficacy and production scalability. suggests that there is. The assessment of ddBCMA’s potential is reflected in Morgan Stanley’s forecast of approximately $5 billion in unadjusted global peak sales across multiple treatment lines. This projection stands in contrast to Kalvikti’s unadjusted global top sales of around $8 billion, according to Veterans Consensus.
When calculating the target price, Morgan Stanley applied a 60% mixed probability of success (PoS) to the ddBCMA program. This PoS reflects high confidence in the success of this therapy in late-stage treatment and provides a more conservative outlook for its application in early treatment lines. Further data is expected in the second half of 2024, which may provide further insight into the efficacy and market potential of this therapy.
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