CRDL - Analysts' Consensus Reaffirms Significant Upside Potential for Cardiol Therapeutics
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CardiolTherapeutics (NASDAQ:CRDL) (TSX:CRDL) , a clinical-stage lifesciences company focused on the research and clinical development ofanti-inflammatory and anti-fibrotic therapies for the treatment ofheart disease, has been attracting substantial interest from investorslooking for opportunities in the biotech sector.
CRDL is currentlydeveloping CardiolRx™ and CRD-38 therapies for heart diseases,including recurrent pericarditis, acute myocarditis, and heartfailure.
Over thepast year, CRDL stock has surged by more than 250%, illustrating theincreasing level of investor interest in the company. The stock nowtrades around $2.35 per share and appears to be on track to test itsnext potential resistance at $3.
For investors who may be wondering whether theymissed out on Cardiol Therapeutics' (NASDAQ:CRDL)(TSX:CRDL) impressive rally, here’s some good news. The stockhas the potential for further upside considering the fact that Cardiolwill release topline data for its Phase 2 MAvERIC-Pilot clinical trialevaluating the efficacy of CardiolRx™ for the treatment of recurrentpericarditis sometime in early June, which, if positive, has thepotential to send the stock higher.
Moreover, several analysts have reiterated that thestock has the potential for significant upside, further reaffirmingCardiol’s growth prospects.
For instance, JoeGantoss of Chimera Research Group says he won’t be surprisedto see Cardiol’s price break past the 3-year high at $4.96 if therecurrent pericarditis data show a clear success and open the path tomove to the next stage with Phase 3 trial.
According to Gantoss, Cardiol Therapeutics(NASDAQ:CRDL) (TSX:CRDL) has many things going in its favor rightnow heading into a critical Phase 2 trial readout in recurrentpericarditis in June that he believes will lead to a positiveoutcome.
Thoseinclude a strong rationale for its mechanism of action as well asreceipt of FDA Orphan Drug Designation (ODD), which suggests apositive signal in an early data subset, plus a tried-and-truerecurrent pericarditis trial design with experienced investigators atthe helm.
Thanksto the FDA ODD grant, CardiolRx™ has a clear path to expedite thedevelopment timeline and will ensure a market exclusivity period of atleast 7 years. And the great thing is that there’s a robust marketfor innovation in this indication, as evidenced by a successful recentdrug launch.
Ata current market cap of $162 million, this is clearly underappreciatedand unrecognized by the market at the present time. For reference,company peer Kiniksa Pharmaceuticals (KNSA) now has a $1.4 billionmarket cap on expected sales of $360-$380 million for treatingrecurrent pericarditis, with single to low double-digit marketpenetration. We also note the example of Jazz Pharmaceuticals (JAZZ)buying out company peer GW Pharma (GWPH) for approximately $7 billionafter Epidiolex, a formulation sharing a similar active ingredientwith CardiolRx™, reached half a billion in sales in epilepsy over 2years (now guiding for a US $1-billion-dollar franchise in the yearsto come).
“Clearly, a $160 million market cap does not do Cardioljustice. With positive data in Q2, the path to market becomes a slamdunk, and the stock should surge to the upside in response,” saysGantoss.
Inaddition, analyst Vernon Bernardino of H.C. Wainwright & Coreiterated their Buyrating and issued a $9 price target , which implies that Cardiol Therapeutics (NASDAQ:CRDL) (TSX:CRDL) has a potentialupside of about 300% from current levels.
There is currently only one FDA-approvedtherapy for recurrent pericarditis. With CardiolRx™’s strongsafety profile vs. anti-inflammatory and immunosuppressive drugs, theanalyst believes CardiolRx™ has the potential to be a safe, newapproach to recurrent pericarditis treatment and is underappreciated.Likewise, Bernardino also expects topline results from MAvERIC-Pilotto be a positive catalyst in early June.
ARCHER is Cardiol’s Phase 2 multi-center,international, double-blind, randomized, placebo-controlled trialinvestigating the safety, tolerability, and impact of CardiolRx™ onmyocardial recovery in patients presenting with acute myocarditis.ARCHER trial design, rationale, and blinded baseline data on the first50 patients randomized were the subject of an oral presentation at theWorld Congress on Acute Heart Failure earlier this month.
According toBernardino, they are positive about the results as they look forARCHER to assist in furthering understanding of the therapeuticpotential of CardiolRx™ and complement the MAvERIC-Pilot Phase 2study.
ARCHERpatient recruitment has been accelerating, with the trial expected toenroll 100 patients in the United States, Canada, France, Brazil, andIsrael. In fact, ARCHER has now exceeded 85% of target enrollment, andas a result, H.C. Wainwright & Co. believes prospects for itscompletion by early 2025 are good.
Huge unmet medical need
Pericarditis is a heartdisorder consisting of inflammation of the pericardium, the membraneor sac that surrounds the heart and protects it from damage duringcontraction. Acute pericarditis lasts about 4-6 weeks beforeresolving, but often patients can experience a second episode. Ifanother episode occurs following a period of 4-6 weeks withoutsymptoms, this is considered recurrent pericarditis.
At the moment, thefirst-line conventional treatment for recurrent pericarditis is NSAIDsor aspirin, with or without colchicine. For the second-line therapy,for patients with continued recurrence and inadequate response,corticosteroids are administered despite safety issues and difficultytapering or discontinuation.
The only FDA-approved therapy, ARCALYST®(rilonacept) averages over $150,000 per year and is primarily used forover three recurrences.
The most common complication of pericarditis is recurrence,occurring in 15-30% of first-time pericarditis cases, somecomplications can be deadly, and an estimated 5% of allhospitalizations for chest pain in the US and Europe are due topericarditis.
Inthe US, the annual prevalence is about 160,000 cases (based on40/100,000) which includes 38,000 cases with a recurrence.Hospitalization costs average $20 – $30k with a 6 – 8-day lengthof stay.
So far,ARCALYST® has had impressive results in recurrent pericarditis andstrong market uptake since its launch in 2021, and this is bullish for Cardiol Therapeutics (NASDAQ:CRDL) (TSX:CRDL) since it reflectsa market in need of innovation and ready to embrace newalternatives.
Takeaway
In summary, the near-term pericarditis clinicalproof-of-concept data expected in early June could be a major catalystand turning point for Cardiol and its valuation. CardiolTherapeutics (NASDAQ:CRDL) (TSX:CRDL) has a strong financialposition, being debt-free and is well-capitalized to achieve corporatemilestones into 2026, which is why analysts remain confident in thecompany’s long-term growth prospects.
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