Wells Fargo initiated coverage of Celldex Therapeutics (NASDAQ:CLDX) with an underweight rating, stating that it believes the Street is “overly optimistic” on the commercial potential of its hives drug candidate barzolvolimab.
The investment bank said it believes the Street has underestimated the time and money it will take to bring the product to market, given the drug’s safety profile and new mechanism of action. Wells Fargo said it sees the Street’s forecast of a 2027 approval and launch of the drug for chronic spontaneous urticaria, or CSU, as “too aggressive.”
Wells Fargo also sees the stock facing headwinds, with six competitor data readouts or events slated by the end of 2023, “which will likely cap shares.” It added that the drug’s upcoming Phase 2 data could end up being a “sell the news event.”
The bank estimates peak US sales for barzolvolimab at around $700M in CSU versus the Street forecast of $1.7B.
Wells Fargo set its price target for the stock at $21.