Stifel: Atreca Offers Attractive Oncology Drug Development Play

The oncology drug development space holds “tremendous scarcity value for novel targets," and Atreca Inc’s BCEL stock offers an investment opportunity at an attractive valuation, according to Stifel.

The Analyst

Stephen Willey initiated coverage of Atreca with a Buy Rating and $28 price target. 

The Thesis

Atreca has a highly differentiated approach to antibody drug discovery that moves completely away from the biologically or genetically derived hypotheses that are traditionally used to inform target selection, Willey said in a Monday initiation note. (See his track record here.) 

Atreca’s proprietary platform technology is used to actively interrogate the active human immune response to access a large and underexploited universe of actionable solid tumor targets that are undiscoverable with conventional approaches, the analyst said. 

The company’s lead preclinical antibody candidate ATRC-101 represents this scarcity value, as neither its target antigen nor mechanism of action were previously characterized within oncology, he said. 

Willey said he expects the preliminary P1b data that potentially confirms ATRC-101's efficacy and safety to result in a significant re-rating of Atreca’s stock, as such data could offer validation of the asset as well as the platform.

The company has guided to a strategic drug discovery partnership in 2020 and an IND filing for a second pipeline candidate in 2021. “We expect pipeline/collaborative optionality to remain an integral part of the longer-term narrative here,” the analyst said. 

Price Action

Atreca shares were down 1.38% at $16.40 at the time of publication Monday. 

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