Shares of Cellectis SA (NASDAQ:CLLS) fell 14.6% on Wednesday following a comprehensive downgrade from Barclays. The investment bank moved its recommendation to Underweight from Overweight and reduced its price target on the gene-editing company to $1.30 from $9.00.
Barclays analyst Lukas Shumway attributed the rating change to a lack of conviction in Cellectis’ two new clinical programs, .HEAL-101 for severe hypertriglyceridemia and .HEAL-201 for hypercholesterolemia. In his revised model, Shumway assigned negative per-share net present values (NPVs) to both programs - -$4 for .HEAL-101 and -$2 for .HEAL-201.
The analyst also reworked valuations for other assets in the company model. The value for lasme-cel was reduced to -$1 from $0. Previously included items were removed from the model: eti-cel and a Pipeline value, which had been assigned $4 and $1 respectively, were taken out.
In addition to the program-specific changes, Shumway’s updated model now includes $2 each allocated to Royalties and Milestones. The model carries -$1 for Debt and $5 for Cash, with the cash figure calculated on the assumption that Cellectis will complete a capital raise in late 2027.
On timing for the clinical pathway, the analyst note states that Cellectis aims to begin clinical activity in China in the first quarter of 2027 with .HEAL-101 in severe hypertriglyceridemia.
Context and market reaction
The downgrade and the sharp reduction in the price target coincided with the one-day share decline recorded Wednesday. Barclays’ reassessment centers on the near- and medium-term commercial and developmental prospects for the company’s lead new programs and the broader pipeline assumptions embedded in its prior valuation.
Key points
- Barclays downgraded Cellectis to Underweight from Overweight and cut the price target to $1.30 from $9.00.
- The analyst assigned negative NPVs to .HEAL-101 (-$4) and .HEAL-201 (-$2) and removed previously included values for eti-cel and Pipeline ($4 and $1 previously).
- The revised valuation model assumes $2 each for Royalties and Milestones, -$1 for Debt and $5 for Cash, with an assumed capital raise in late 2027; Cellectis plans to enter the clinic in China with .HEAL-101 in Q1 2027 according to the analyst note.
Risks and uncertainties
- Program valuation risk - Barclays’ assignment of negative NPVs to .HEAL-101 and .HEAL-201 highlights uncertainty around the commercial and clinical prospects of those programs, affecting biotech and healthcare investors.
- Funding and balance-sheet risk - The analyst’s model assumes a capital raise in late 2027; execution and timing of such a raise could affect equity and credit markets for the company.
- Pipeline and development uncertainty - Removal of prior values for eti-cel and Pipeline suggests material uncertainty around the broader pipeline, with implications for future revenue and valuation assumptions in the gene-editing sector.
This reporting is based on the analyst note and market moves described by Barclays and market data. The facts presented reflect the contents of the analyst’s valuation changes and the company’s stated clinical timing as noted in the analyst communication.