Stifel starts Equillium at buy; PT $22

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Stifel initiated coverage of Equillium (NASDAQ:EQ) with a “buy” rating and $22 price target. The stock closed at $16.34 on Nov. 5.

“Our bullish thesis centers on the potential for lead asset, EQ001, a first-in-class monoclonal antibody that selectively targets the novel immune checkpoint pathway, CD6, for the treatment of severe immune-inflammatory disorders with high unmet need,” writes analyst Adam Walsh.

With clinical validation already in place, “we view EQ001 as a partially de-risked asset with a mechanism that works upstream of approved biologic therapies and, therefore, may be effective in a broad swath of immune mediated diseases,” he added.

Acknowledge a lack of near-term readouts, Mr. Walsh is looking to management's selection of a fourth indication for EQ001 in the first half of 2019 and potential Phase 1b/2 acute graft-versus-host disease (GVHD) interim data in the second half of 2019 to be “first movers of the shares.”

In addition, a Phase 2 trial of EQ001 in chronic GVHD is expected to start in the first half of 2019 and a proof-of-concept trial in severe refractory asthma is slated to begin in the first half of 2019, he said.

Stephen Kilmer