C4 Therapeutics – Strong buy

Let’s move on now to the biotech sector. C4 Therapeutics is a biopharmaceutical company operating in the targeted protein degrader space. That is, the company is engaged in the development of novel early-stage therapies that can potentially eliminate disease-causing proteins. These are indicated to treat cancer, neurodegenerative conditions, and other diseases.

To do so, the company utilizes its TORPEDO discovery platform which creates a new class of small molecule therapies with the ability to selectively and efficiently remove disease-causing proteins, including in areas previously thought to be unreachable.

As with any biotech company, it’s the pipeline of drugs in development that matters. Leading the way for C4 is CFT-7455, a novel degrader targeting IKZF1/3 and indicated as a therapy for multiple myeloma (MM) and non-Hodgkin’s lymphomas (NHL). The drug has now entered Phase 1/2 testing, and initial data from Cohort A will be presented next month (April) at the American Association for Cancer Research (AACR) Annual Meeting.

The company also received IND clearance for CFT8634, a degrader aimed at BRD9; A Phase 1 trial in Synovial Sarcoma and SMARCB1-null Solid Tumors is expected to kick off in 1H22, while orphan drug designation (ODD) for the treatment of soft tissue sarcoma was granted by the FDA earlier this month. There are other prospective cancer treatments which are in still in the pre-clinical stages.

It might still be early days for the pipeline, but J.P. Morgan’s Eric Joseph has high hopes for this biotech stock. He writes: “In keeping with our generally bullish outlook on the differentiated therapeutic potential targeted protein degraders (TPDs), we view C4 as a compelling and underappreciated name within the broader space. Pursuing both monofunctional (aka molecular glues) and heterobifunctional compound formats, we believe the company’s TORPEDO discovery platform has potentially greater flexibility to generate multiple shots on goal with ideal drug-like properties across a diversity of cancer indications.”

All of this prompted Joseph to rate C4 shares a Buy rating along with a $43 price target. This target conveys his confidence in C4’s ability to climb ~84% higher in the next year.

Like Shoals above, C4’s Strong Buy consensus rating is based on 6 Buys vs. 2 Holds. The average target is even more bullish than Joseph will allow; at $49.13, the shares are anticipated to be changing hands for ~111% premium a year from now.