Small Cancer Player Werewolf Therapeutics' Stock Undervalued: Analyst Says Treatment Platform Underappreciated

Wedbush initiated coverage on Werewolf Therapeutics Inc HOWL with an Outperform rating and a price target of $9.

The analysts Robert Driscoll, Martin Fan, Ritika Das, and Sam Ravina note the company's conditionally-activated cytokines (INDUKINES) that leverage its proprietary PREDATOR platform for solid tumors. 

Wedbush writes that INDUKINE technology has the potential to overcome the toxicity/delivery challenges that have limited the development of current cytokine-based approaches, and HOWL's initial focus on IL-2 and other proinflammatory cytokines allows for a high likelihood of success. 

The analysts note that the market underappreciates the breadth and value of the platform, and they see an attractive risk/reward ahead of initial clinical data from lead asset WTX-124, currently in Phase 1 study,  in 4Q 2023. 

INDUKINE molecules incorporate protease cleavable inactivation and half-life extension domains to create conditionally active cytokines with favorable safety and PK profiles.

Supported by robust preclinical data for the PREDATOR platform, the strategic choice of targets that complement the standard of care, and the notable commercial promise of conditionally active cytokines, Wedbush analysts say that HOWL shares are undervalued.

As of June 30, 2023, cash and cash equivalents were $137.5 million, which is expected to provide a cash runway through at least the fourth quarter of 2024.

Price Action: HOWL shares are up 16.86% at $3.01 on the last check Thursday.