Lakefront Biotherapeutics (LKFT) has a "meaningful opportunity" with its asset gamgertamig for the treatment of rare autoimmune diseases, RBC Capital Markets said in a note Wednesday.

Gamgertamig has "potential efficacy across several indications and a differentiated safety profile," the note said.

Additionally, its "near-term data should further de-risk the program and potentially draw greater investor interest," RBC said, adding that "recent CAR-T hiccups may steer enthusiasm towards bispecifics like gamgertamig for autoimmune diseases."

RBC noted that Lakefront's negative enterprise value implies that investors are assigning zero value to gamgertamig, which means that this is "an opportune time to step in."

The investment firm said gamgertamig's "potential in rare autoimmune diseases is underappreciated by investors, with initial data demonstrating rapid and deep B-cell depletion."

RBC upgraded Lakefront's rating to outperform from sector perform, adding a speculative risk due to "clinical/regulatory uncertainties potentially impacting revenue." The investment firm raised the company's price target to $45 from $26.

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