Corvus Pharmaceuticals stock is looking like a steal as the company gets closer to releasing a new oral medication for a common chronic skin condition, according to Goldman Sachs. The investment bank has initiated coverage of Corvus Pharmaceuticals with a buy rating. It also put a $40 price target on shares, implying 166% upside from Thursday’s close. “We think CRVS shares are attractively positioned as the current valuation does not capture the potential of what we view as a differentiated, emerging oral option for atopic dermatitis (AD),” Goldman Sachs analyst Paul Choi said Friday in a note to clients. Corvus rose about 9% on Friday following the call from Goldman Sachs. CRVS 1D mountain Corvus Pharmaceuticals stock rose 12% on Friday. Goldman Sachs is bullish on the stock largely due to Corvus’ ongoing development of a non-steroidal oral drug called soquelitinib (CPI-818), which aims to treat atopic dermatitis, a form of eczema. The biopharmaceutical company’s efforts come as demand for moderate-to-severe atopic dermatitis treatments booms. The global market for those medicines is projected to grow to more than $24 billion by 2035, according to the investment bank. “There remains a large unmet need for next-generation treatment to provide dosing advantage either with longer injection intervals or via oral administration,” Choi wrote. The analyst noted that the market for non-steroidal treatments targeting eczema and other chronic skin conditions has become increasingly crowded. However, soquelitinib is likely to stand out among its peers, due in part to its efficacy, according to Goldman Sachs. Earlier this year, the medication had a positive effect on 75% of participants in an early-stage clinical trial, the drugmaker said in a statement dated Jan. 20. Goldman Sachs’ call aligns with consensus on the Street. All seven analysts covering the stock have a buy or strong buy rating on shares, LSEG data shows. Shares have surged 113% year to date.
