Story
Cellectis Shares Plunge After Barclays Double-Downgrade to Underweight
Summary
The gene-editing company's stock fell sharply after a Barclays analyst cut the rating to 'Underweight' from 'Overweight' and slashed the price target, citing a lack of confidence in new clinical programs.
Shares of Cellectis SA (NASDAQ:CLLS), a clinical-stage gene editing company, plunged 14.6% in Wednesday's trading session following a significant double-downgrade from Barclays. The bank lowered its rating on the stock to 'Underweight' from a previous 'Overweight' and drastically cut its price target.
Analyst's Rationale
In a research note, Barclays analyst Lukas Shumway explained the downgrade was driven by a lack of conviction in Cellectis' new clinical programs. The firm expressed skepticism about the potential of .HEAL-101, intended for severe hypertriglyceridemia, and .HEAL-201 for hypercholesterolemia.
Barclays assigned negative per-share net present values (NPVs) to these new assets, valuing .HEAL-101 at -$4 per share and .HEAL-201 at -$2 per share. This negative valuation indicates the bank's belief that the costs and risks associated with these programs currently outweigh their potential future returns.
Revised Valuation Model
AdThe analyst's new model reflects a substantial reassessment of the company's pipeline and financial position, slashing the price target to $1.30 from a previous $9.00. Key changes to the valuation include:
- The removal of previous values for `eti-cel` and other pipeline assets, which were formerly valued at $4 and $1, respectively.
- A reduction in the valuation for `lasme-cel` to -$1 from $0.
- The new model now primarily consists of $5 for cash, $2 each for royalties and milestones, and -$1 for debt.
Barclays' model also assumes Cellectis will need to conduct a capital raise in late 2027. According to the note, Cellectis aims to begin clinical trials for .HEAL-101 in China in the first quarter of 2027.
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