ALLO - Allogene stock rises ~15% as JPMorgan upgrades on near-term catalysts

Allogene Therapeutics ( NASDAQ: ALLO ) stock rose ~14% on Tuesday after JPMorgan Chase upgraded the shares to Overweight from Neutral with a price target of $11 from $20, based on fundamentals and near-term catalysts.

The SA Quant Rating on ALLO is Hold , which is in contrast to the average Wall Street Analysts' Rating of Buy .

JPMorgan noted that it upgraded ALLO based on discussions with management over the past several weeks. The upgrade was a valuation call driven by upside from the current level as the JPMC views a healthy strategic shift happening behind-the scenes to place more focus on the lead CD19 franchise.

JPMorgan sees Allogene's CD19 '501A program still a commercially viable candidate with a competitive profile compared to other auto CAR-Ts in the late-line setting in large B cell lymphoma (LBCL).

The firm expects CD19's global peak sales of about $285M by 2034, which could prove conservative if the program jumps to an earlier-line setting.

The firm added that setting aside the manufacturing tweaks that Allogene is evaluating for the B cell maturation antigen  (BCMA) franchise, the company seemed receptive to partnerships to move the program ahead.

The firm thinks that a potential new strategy will fundamentally remove a key overhang on Allogene and allow the company to focus its efforts on CD19 and CD70+ RCC that showed early promise at the company's R&D day last quarter.

JPMorgan noted that it is waiting for updates on the next steps in BCMA, and interim data from an ongoing phase 1 study, dubbed TRAVERSE, in RCC later in 2023.

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