The shares of Cabaletta Bio ( NASDAQ: CABA ), a biotech focused on T cell therapies, fell ~5% in the pre-market trading Monday after Morgan Stanley downgraded the company to Equal Weight, citing an upcoming data readout for its lead asset DSG3-CAART.
On Monday, CABA announced that data from a Phase 1 trial for DSG3-CAART in autoimmune skin disease mucosal pemphigus vulgaris would be disclosed at a medical event in early September.
However, after seeing its abstract, Morgan Stanley argues that the candidate's efficacy "remains limited and unclear."
The analysts point out that the data for cohort A4 and safety data from cohort A5 showed no clear trends in disease activity, and only one patient in three-patient Cohort A4 looked to have sustained activity.
While DSG3-CAART could be potent in mPV, the "uncertainty related to activity and emerging questions around longer-term persistence, despite a notable increase in dose," prompted the downgrade, the analysts wrote, slashing the CABA price target to $3 from $15 per share.
Wall Street has remained bullish on Cabaletta ( CABA ) stock, with an average rating of Strong Buy from analysts. However, Seeking Alpha's quant system, which consistently beats the market , rated CABA as a Hold.
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Cabaletta downgraded at Morgan Stanley on upcoming data for lead asset