Leerink resumed coverage of Calithera Biosciences (NASDAQ:CALA) with an “outperform” rating and a $16 price target, saying the company is well positioned to execute with multiple sources of upside. The stock closed at $11.55 on March 31.
Calithera is developing oncology drugs in the promising tumor and immune cell metabolism space.
“We view CB-1158, an arginase inhibitor, as promising and representing an important source of upside for the stock,” writes analyst Jonathan Chang.
“We see a compelling mechanistic rationale for combining CB-1158 with immuno-oncology drugs, with the recent Incyte partnership providing some validation for the program, although it is still in the early stages of development,” he added.
Mr. Chang said he views the company’s lead asset, CB-839, a glutaminase inhibitor, to be “less compelling,” given the competitive dynamics of the indications being pursued.
“In sum, we view Calithera as well-positioned to execute on its strategy with a strong management team and financial position ahead of key milestones that could provide further validation of Calithera's strategy,” he said.