Analysts Consensus Reaffirms Significant Upside Potential for Cardiol Therapeutics (NASDAQ:CRDL) (TSX:CRDL)

Analysts Consensus Reaffirms Significant Upside Potential for Cardiol Therapeutics (NASDAQ:CRDL) (TSX:CRDL)
According to Gantoss, Cardiol Therapeutics (NASDAQ:CRDL) (TSX:CRDL) has many things going in its favor right now heading into a critical Phase 2 trial readout in RP in June that he believes will lead to a positive outcome.

Cardiol Therapeutics (NASDAQ:CRDL) (TSX:CRDL), a clinical-stage life sciences company focused on the research and clinical development of anti-inflammatory and anti-fibrotic therapies for the treatment of heart disease, has been attracting substantial interest from investors looking for opportunities in the biotech sector.

CRDL is currently developing CardiolRx™ and CRD-38 as small molecule therapies for heart diseases, including pericarditis, acute myocarditis, and heart failure.

Over the past year alone, CRDL stock has surged by more than 250%, illustrating the increasing level of investor interest in the company. The stock now trades at about $2.35 per share and appears to be on track to test its next potential resistance at $3.

For investors who may be wondering whether they missed out on Cardiol Therapeutics’ (NASDAQ:CRDL) (TSX:CRDL) impressive rally, here’s some good news. The stock has the potential for further upside based on the fact that Cardiol will release early data for its Phase 2 Maverick clinical trial evaluating the efficacy of CardiolRx for the treatment of recurrent pericarditis sometime in June, which, if positive, has the potential to send the stock higher. .

Moreover, several analysts have reiterated that the stock has the potential for significant upside, further reaffirming Cardilol’s growth prospects. 

For instance, According to Gantoss, Cardiol Therapeutics (NASDAQ:CRDL) (TSX:CRDL) has many things going in its favor right now heading into a critical Phase 2 trial readout in RP in June that he believes will lead to a positive outcome. 

Those include a strong rationale for its mechanism of action as well as receipt of orphan drug designation (ODD), which suggests a positive signal in an early data subset, plus a tried-and-true RP trial design with experienced investigators at the helm. 

Thanks to the FDA ODD, CardiolRx has a clear path to expedite the development timeline and will ensure a market exclusivity period of at least 7 years. And the great thing is that there’s a robust market for innovation in this indication, as evidenced by a successful recent drug launch

At a current market cap of $162 million, this is clearly underappreciated and unrecognized by the market at the present time. For reference, Kiniksa (NASDAQ:KNSA) now has a $1.4 billion market cap on expected sales of $360-$380 million with single to low double-digit market penetration, and we note the example of Jazz buying out GW-Pharma (GWPH) for approximately $7 billion after Epidiolex reached half a billion in sales in epilepsy over 2 years (now guiding for a US $1-billion-dollar franchise in the years to come).

“Clearly, a $160 million market cap does not do Cardiol justice. With positive data in Q2, the path to market becomes a slam dunk, and the stock should surge to the upside in response,” says Gantoss.

In addition, analyst Vernon Bernardino of H.C. Wainwright & Co reiterated their Buy rating and issued a $9 price target, which implies that Cardiol Therapeutics (NASDAQ:CRDL) (TSX:CRDL) has a potential upside of about 300% from current levels.  

This is based on the fact that there is currently only one FDA-approved therapy for RP, and with CardiolRx’s strong safety profile vs. anti-inflammatory and immunosuppressive drugs, the analyst believes CardiolRx’ potential to be a safe, new approach to RP treatment, is underappreciated. He also expects top-line results from MAvERIC to be a positive catalyst in early June 2024.

Furthermore, ARCHER presentation on the world stage is evidence of the high-level of  interest in CardiolRx.

ARCHER is a multi-center, international, double-blind, randomized, placebo controlled trial investigating the safety, tolerability, and impact of CardiolRx on myocardial recovery in patients presenting with AM. ARCHER details and results were the subject of an oral presentation at the World Congress on Acute Heart Failure.

Cardiol Therapeutics (NASDAQ:CRDL) (TSX:CRDL) announced the presentation of trial design, rationale, and blinded baseline data on the first 50 patients randomized into the company’s ARCHER Phase 2 clinical trial with CardiolRx.

According to Bernardino, they are positive about the results as they look for ARCHER to assist in furthering understanding of the therapeutic potential of CardiolRx, and complement the MAvERIC-Pilot Phase 2 trial study in patients with RP.

ARCHER patient recruitment has been accelerating, with the trial expected to enroll 100 patients in North America, France, Brazil, and Israel. In fact, ARCHER has now exceeded 85% of target enrollment, and as a result, H.C. Wainwright & Co. believes prospects for its completion by early 2025 are good.

The primary outcome measures of the trial, will be evaluated following 12 weeks of double-blind therapy, and will consist of two cardiac magnetic resonance imaging measures: longitudinal strain, as measured by left ventricular function (LVF), and extracellular volume, a measure of myocardial edema and fibrosis. Each measure has been shown to predict long-term prognosis of patients with AM.

Huge unmet medical need

Pericarditis is a heart disorder consisting of inflammation of the pericardium, the membrane sac that surrounds the heart and protects it from damage during contraction. Acute pericarditis lasts about 4-6 weeks before resolving, but often patients can experience a second episode. If another episode occurs following a period of 4-6 weeks without symptoms, this is considered recurrent pericarditis. 

At the moment,  the first-line conventional treatment for RP is NSAIDs or aspirin, with or without colchicine. For the second-line therapy, for patients with continued recurrence and inadequate response, corticosteroids are administered despite safety issues and difficulty tapering or discontinuation.

The only FDA-approved therapy, ARCALYST® (rilonacept) averages over $150,000 per year and is primarily used for over three recurrences.

The most common complication of pericarditis is recurrence, occurring in 15-30% of first-time pericarditis cases, some complications can be deadly, and an estimated 5% of all hospitalizations for chest pain in the US and Europe are due to pericarditis.

In the US, the annual prevalence is about 160,000 cases (based on 40/100,000) which includes 38,000 cases with a recurrence. Hospitalization costs average $20 – $30k with a  6 – 8-day length of stay.

So far, Arcalyst has had impressive results in RP and strong market uptake since its launch in 2021, and this is bullish for Cardiol Therapeutics (NASDAQ:CRDL) (TSX:CRDL) since it reflects a market in need of innovation and ready to embrace new alternatives.

Takeaway

In summary, the near-term pericarditis clinical proof-of-concept data expected in June will be a major catalyst and turning point for Cardiol and its valuation. Cardiol Therapeutics (NASDAQ:CRDL) (TSX:CRDL) has a strong financial position, being debt-free and is well-capitalized to achieve corporate milestones into 2026, which is why analysts remain confident in the company’s long-term growth prospects.

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