Stifel Bullish On Iovance And Fate Therapeutics, Neutral On Bluebird Bio

Stifel initiated coverage on a trio of oncology-focused biotechs Tuesday, recommending buying two and staying sidelined on a third.

The Analyst

Benjamin Burnett initiated coverage of:

bluebird bio Inc NASDAQ: BLUE) with a Hold rating and $109 price target.

Iovance Biotherapeutics Inc NASDAQ: IOVA) with a Buy rating and $27 price target

Fate Therapeutics Inc FATE with a Buy rating and $27 price target

Gene Therapy Launch, Multiple Myeloma Uncertainty Temper Optimism On Bluebird

The slow launch anticipated for Zynteglo, bluebird bio's gene therapy to treat transfusion-dependent β-thalassemia, and competitive programs imparting uncertainty to its multiple myeloma market have left Stifel wary of bluebird bio.

These concerns are likely to be mitigated by a neutral stance on Lenti-D in cerebral adrenoleukodystrophy, an inherited neurological disorder, and Burnett's confidence in the company's ability to churn out new assets, providing further diversification for the longer term.

Blockbuster Potential For Iovance's TIL Product In Melanoma, Cervical Cancer

The market opportunity for an autologous tumor infiltrating lymphocyte therapy in advanced melanoma/cervical cancer settings could reach a peak of more than $2 billion, Burnett said.

The analyst said he expects the upcoming pivotal readouts to be positive. Additionally, the competitive landscape appears to be favorable for Iovance, he said.

Stifel Likes Setup Into FT500, FT516 Data Readouts

The data readout on Fate's iPSC-derived NK cell cancer immunotherapy FT500 due later this year is likely to validate the safety of the iPSC-derived NK cell platform, Burnett said.

The analyst is also positive about the potential for FT516 to generate competitive efficacy data in acute myeloid leukemia.

"Additionally, we also believe the cadence of INDs, two within the next 6-9 months, will further drive enthusiasm for the platform while diversifying the company's opportunity set within oncology."