BMO Capital Sees Over 400% Upside For This Small Gene-Editing Stock

BMO Capital Markets initiated coverage on Graphite Bio Inc GRPH, with a price target of $12 and an Outperform rating.
The analyst notes that Graphite's gene editing approach involves a DNA repair mechanism that is known to be less vulnerable to errors.
BMO writes that Graphite's platform is expected to be safer than existing approaches while maintaining sufficiently high efficacy.
The analyst writes that the company's GPH101 utilizes a gene correction strategy to reverse the SCD-driving mutation to restore normal adult hemoglobin (HbA) expression.
It offers a differentiated strategy from competitors and could provide superior prevention of end-organ damage in the longer run.
A 25% probability of success for GPH101 and expected Ph1/2 readout in 2023 achieving ~55%+ HbA levels will drive more than 50% upside in the stock.
"Beyond SCD, Graphite's preclinical programs target diseases with high unmet need, including Beta-thalassemia and Alpha-1 Antitrypsin Deficiency... Graphite's gene editing platform allows for gene correction, replacement, and insertion, providing significant optionality around addressable diseases," BMO writes.
Price Action: GRPH shares are up 13.10% at $2.42 during the market session on the last check Friday.