Leerink starts Translate Bio at OP; PT $24

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Leerink initiated coverage of Translate Bio (NASDAQ:TBIO) with an “outperform” rating and $24 price target. The stock closed at $15.94 on July 20.

Translate Bio is developing MRT5005, a messenger RNA (mRNA)-based therapeutic, that when delivered by a nebulizer to the lung encodes for a functional cystic fibrosis transmembrane conductance regulator (CFTR) protein. 

Analyst Geoffrey Porges writes that preclinical data suggest that Translate Bio can adequately deliver MRT5005 mRNA to the lungs, leading to the expression of functional CFTR protein in animal and non-human primate models. 

MRT5005 recently entered into a Phase 1/2 clinical trial in adults with Class 1 and 2 mutations in cystic fibrosis. Safety and early efficacy results from the study are expected in the fourth quarter of 2018. 

“Given the high unmet need in this indication, we believe that this product, if successful, could deliver revenue of $1.8-billionn from Class 1 CF patients alone,” Mr. Porges said. “We currently value the company based on a 15% probability of development success in Class 1 CF, and also include potential use in other CF mutations with a 10% probability of success,” he said, adding that he is forecasting a MRT5005 launch in late-2022.

Stephen Kilmer