Enliven Therapeutics Well-Positioned, With Conservative Trading Levels-Analyst Says

Mizuho Securities initiated coverage on Enliven Therapeutics Inc ELVN, a clinical-stage precision oncology company focused on discovering and developing next-generation small molecule kinase inhibitors.

The company’s lead product, ELVN-001, is under development for Chronic myelogenous leukemia (CML), a slow-progressing blood cancer that begins in the bone marrow.

Thursday, Enliven Therapeutics will host a webcast to discuss initial proof of concept data on ELVN-001.

Additional Phase 1 data is expected in 2025, but Mizuho expects late 2024 could also be possible.

Mizuho writes that the CML tyrosine kinase inhibitors (TKI) market is established, ~$13 billion-$14 billion worldwide, and it has been growing since 2001 when Novartis AG’s NVS Gleevec (imatinib) became the first TKI to receive regulatory approval. 

Over the last two decades, there have been four generations of TKIs approved for this disease. 

However, approved TKIs are still limited in their design and, therefore, still produce various safety/tolerability issues. 

The analyst writes that Enliven is well-positioned to address these shortcomings, and if it succeeds in doing so, this should garner an alpha opportunity for investors. 

Mizuho initiates with a Buy rating and a price target of $34.

Mizuho says that in the past two decades, even the least successful CML TKI has consistently generated at least $500 million in sales at its peak. 

Additionally, the prevalence of CML is increasing, with the global market currently valued at around $13-14 billion in branded sales. 

Considering this, the current trading value of ELVN, at around 1x its projected minimum peak sales in this market, appears to be quite conservative. 

Typically, investors are comfortable with multiples of 2-4x the expected peak sales for biotech companies showing growth potential. Therefore, the trading levels for ELVN-001 seem cautious.

Price Action: ELVN shares are up 3.72% at $18.98 on the last check Tuesday.

Illustration of Phrama lab worker created with MidJourney