Analyst Downgrades Adicet Citing Uncertainty, Awaits Long-Term Data On Durability

JMP Securities downgraded Adicet Bio Inc ACET to a Market Perform (from Market Outperform) and removed the price target of $19, citing evolving landscape and uncertainty regarding the start of pivotal studies. 

The rating is based on an expected cash balance of $114.3 million at the end of Q1 2024, with 43.1 million shares outstanding, resulting in a value of $2.65. Q1 FY23 cash balance stood at $231.6 million.

The analyst notes that since biotech stocks can trade anywhere between 1x-2x cash, ACET shares will trade between $2.65-$5.30, making the stock fairly valued. 

The shares have tanked after the company released shared safety and efficacy data from its Phase 1 study of ADI-001 for relapsed or refractory aggressive B-cell non-Hodgkin's lymphoma (NHL).

The recent updates and push out of timelines have caused the JMP analyst to move to the sidelines as it awaits longer-term follow-up.

The analyst says the safety profile from the Phase 1 ADI-001 study could be advantageous for the company and awaits additional patients across the high-level dose cohorts. 

Adicet recently completed a Type B meeting with the FDA and is moving forward to a potentially pivotal Phase 2 study with 1 billion CAR-positive cells as the recommended Phase 2 dose in 100 post-CAR T LBCL patients, with the study slated to begin in 1H24. 

In its Q1 earnings release, the company stated it was preparing to initiate its first potential pivotal study with ADI-001 in the fourth quarter of 2023.

Price Action: ACET shares are down 57.20% at $1.99 on the last check Tuesday.