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Coronavirus Vaccine Could Add Massive Value to This Small-Cap Stock, Says Analyst

COVID-19 vaccine development across the globe is charging ahead with over 120 possible vaccines in progress. Healthcare companies of all sizes have thrown the proverbial hat into the lab, knowing a vaccine will be critical in bringing the pandemic to an end.

The latest to join the fray is microcap Lineage Cell Therapeutics (LCTX). Maxim analyst Jason McCarthy argues the company’s unique approach could set it apart from the competition.

“Lineage, though early stage, has a differentiated approach using dendritic cells to elicit an immune response, which may be better equipped to confer protection vs. more traditional approaches,” McCarthy noted.

Earlier this week, Lineage disclosed that it had applied for CIRM (California Institute for Regenerative Medicine) funding to progress with its VAC cell therapy platform as a prophylactic vaccine for COVID-19.

The company’s allogeneic cell therapy VAC program is an immunotherapy platform based on antigen-presenting dendritic cells, (these are professional antigen presenting cells – or APCs), which activates a T-Cell response. VAC could potentially prompt a potent and long-lasting immunological memory, through changing the cells to present viral antigens from SARSCoV-2.

McCarthy believes the move into developing a COVID-19 vaccine is not particularly surprising as “the company’s APC platform was already being applied to oncology.”

The analyst expounded, “Note that oncology and infectious disease (ID), from an immune response perspective, go together, something that seems to be forgotten when we consider progress in oncology at the clinical and commercial levels. As such, value remains unlocked in ID, in our view. From an LCTX perspective in COVID, while its early stage, and we await more details, it could set the stage for additional upside if positive data emerges.”

McCarthy maintains a Buy rating on LCTX, along with a $3.00 price target. Expect returns of a hefty 225% should the analyst’s thesis play out. (To watch McCarthy’s track record, click here)

Overall, activity among analysts regarding LCTX remains low, as over the last 3 months only one other analyst has issued a review on the small biotech’s prospects. The additional Buy rating hands Lineage with a Moderate Buy consensus rating. With an average price target of $3.50, the possible upside over the next 12 months is a plentiful 266%.

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