HCW starts Cesca Therapeutics at buy; PT $1.50

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H.C. Wainwright launched coverage of Cesca Therapeutics (NASDAQ:KOOL) with a “buy” rating and $1.50 price target. The stock closed at 53 cents on May 22.

Cesca is focused on cell-based therapies and automated cell processing, and is developing new manufacturing solutions for CAR-T therapies.

Cesca currently markets a range of cell processing products in the U.S. and China, which “we expect would continue to provide a steady revenue stream,” writes analyst Swayampakula Ramakanth.

In 2017, the company applied its expertise in cell processing to develop an automated CAR-T manufacturing platform called, CAR-TXpress, which “we believe represents a major growth opportunity,” he added.

Mr. Ramakanth said CAR-T therapies are projected to be one of the fastest growing therapeutic areas. But further advancements in CAR-T research and adoption could be stemmed by high production costs, which are currently estimated to be nearly $100,000 per patient.

“We believe the high cost results from insufficient starting T-cell material; labor-intensive and time-consuming processing steps; expensive reagents and machinery; large clean room footprints; and complicated c-GMP compliance requirements,” he said.

“In our view, Cesca’s CAR-TXpress could improve on all five aspects and significantly reduce the time and cost of CAR-T manufacturing,” Mr. Ramakanth said.

Stephen Kilmer