Ladenburg starts Arcturus at buy; PT $22

target-price_3.jpg

Ladenburg Thalmann initiated coverage of Arcturus Therapeutics (NASDAQ:ARCT) with a “buy” rating and $22 share price target. The stock closed at $8.71 on Nov. 28.

Arcturus has developed a novel biodegradable lipid nanoparticle (LNP) delivery system named LUNAR and a proprietary RNA chemistry platform named UNA with the potential to unlock the full potential of RNA medicines.

Since its founding in 2013, Arcturus has attracted five partnerships: Janssen (siRNA for HBV), Takeda (mRNA for NASH), Ultragenyx (mRNA for rare diseases), Cystic Fibrosis Foundation (mRNA for cystic fibrosis) and Synthetic Genomics (mRNA for vaccine). The company also has a robust internal pipeline focusing on mRNA therapy for rare diseases.

“Arcturus appears to be the only company currently with a reported advanced biodegradable LNP platform to overcome lipid accumulation toxicity of previous LNPs for chronic repeat dosing of RNA medicine, and is one of only a few companies with both a proprietary RNA delivery and RNA chemistry platforms,” writes analyst Wangzhi Li.

Arcturus recently listed on the NASDAQ through a reverse merger with Alcobra and is currently traded at a market cap of about $95-million with $50-million cash, he added. In addition, he said the company’s enterprise value (EV) of about $45-million is only 12% of the average EV of the other 10 comparable public RNA medicine companies.

“We believe Arcturus presents an attractive investment opportunity in the rising RNA medicine field and a rare publicly traded company available for investing in the burgeoning mRNA therapy space,” Mr. Li said.