Q32 Bio Inc. (QTTB) PT Slashed to $20 at Piper Sandler Following 'Messy' P2a Readouts

Piper Sandler analyst Christopher J. Raymond lowered the price target on Q32 Bio Inc. (NASDAQ: QTTB) to $20.00 (from $85.00) while maintaining an Overweight rating.

The analyst said: "Remain OW rated on QTTB shares despite what one can only characterize as messy P2a readouts for bempikibart in both atopic dermatitis (AD) and alopecia areata (AA). In Part B of the SIGNAL-AD trial (N=106), there was no difference between treatment and placebo on EASI score reduction due to an abnormally high placebo rate (76%), and QTTB is halting all further development activities in this indication. For AA (N=44), efficacy data were underwhelming compared to approved JAKi’s, and although the company has a plan to try and boost efficacy, we think the risk here is high and are taking this out of our model for now. This leaves differentiated complement inhibitor ADX-097 as the sole value driver in our model, and we look to preliminary data from the P2 renal basket trial in 1H25 to establish the future value of this name. Price target goes down to $20 from $85 (stock traded ~$8 after hours).

There’s still value here, in our view. After removing bempi from our model but keeping ADX-097 estimates the same, we derive a new price target of $20 based on 10x 2031E revenues discounted back by 25% to end of 2025 (previously $85 PT based on 12x FY30E revenue of $427M, discounted back by 20%/yr to Q425). We believe the move in valuation year is warranted based on ADX-097 becoming the primary value driver, which we expect to be approved in 2030, and we also believe the lower multiple and higher discount rate are warranted based on the greater risk of solely valuing one earlier-stage asset."

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