Recently public biotech Kyverna Therapeutics could become a developer of successful cell therapies for autoimmune diseases, according to Morgan Stanley. Analyst Michael Ulz initiated research coverage of the clinical-stage biopharmaceutical company with an Overweight rating and a $40 price target, implying an upside of about 43% from Friday’s close. Kyverna began trading on the Nasdaq on February 8, jumping 56% to reach a market capitalization of $1.4 billion. The stock opened at $34.25, above its initial public offering price of $22 per share, and closed Friday at $27.75. The company, which develops cell therapies for individuals with autoimmune diseases, is currently developing its lead product candidate, KYV-101, a CAR-T cell therapy originally designed as a next-generation therapy for oncology, but which has also proven to be effective have comparable efficacy and better tolerability for autoimmunity, according to Ulz. “Cell therapy for autoimmune diseases is an emerging and increasingly competitive space, representing a potentially large market opportunity, and we believe Kyverna is well positioned given promising early data and differentiation potential,” wrote the analyst in a note on Monday. Although KYV-101 data is limited, Ulz wrote that he is “highly encouraged given the promising results in multiple indications, multiple sites, and in challenging patients.” Kyverna aims to administer the drug to 100 patients in 2024, he noted, adding that he expects several updates this year on the drug’s potential in autoimmune diseases. The analyst highlighted that cell therapies have “significantly improved” the treatment of B-cell tumors and that multiple therapies are currently approved, increasing the therapies’ potential to treat autoimmune diseases. However, this also makes the autoimmune treatments space more competitive, Ulz noted. “Demonstrating a favorable product profile (i.e. efficacy and safety) will be key to success and we believe early data suggests KYV-101 is well positioned, but further data from Kyverna and others are needed to understand how this evolves dynamics,” Ulz wrote in the note. “That said, we see opportunities for differentiation in other areas, such as selecting different indications (e.g. MS) and improving manufacturing (e.g. Ingenui-T).” Ingenui-T is a next-generation process in preclinical development for the production of autologous anti-CD19 CAR T-cell therapy and uses the same CAR construct as KYV-101, Kyverna said. Ulz pointed out that Kyverna is also developing a next-generation cell therapy, KYV-201, currently in preclinical development that “could provide further differentiation” to the company’s product portfolio.