Newly public biotech Kyverna Therapeutics could be a blockbuster cell therapy developer for autoimmune disease, according to Morgan Stanley. Analyst Michael Ulz initiated research coverage of the clinical-stage biopharmaceutical company with an overweight rating and $40 price target, implying roughly 43% upside from Friday’s close. Kyverna began trading on Nasdaq on Feb. 8, when it jumped 56% to reach a market capitalization of $1.4 billion. The stock opened at $34.25, above the 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 that was originally designed as a next-generation therapy for oncology, but has also proven to have comparable efficacy and improved tolerability for autoimmunity, according to Ulz. “Cell therapy for autoimmune disease is an emerging and increasingly competitive space, which represents a potentially large market opportunity, and we believe Kyverna is well-positioned given promising early data and potential for differentiation,” the analyst wrote in a Monday note. Although the data from KYV-101 is limited, Ulz wrote that he’s “highly encouraged given promising results across multiple indications, multiple sites, and in challenging patients.” Kyverna aims to dose 100 patients in 2024, he noted, adding that he expects several updates this year about the drug’s potential in autoimmune disease. The analyst pointed out that cell therapies have “meaningfully improved” the treatment of B-cell cancers and that multiple therapies are currently approved, increasing the therapies’ potential to treat autoimmune diseases. That also makes the autoimmune treatment space more competitive, however, Ulz noted. “Demonstrating a favorable product profile (i.e. efficacy and safety) will be key to success, and we believe early data suggest KYV-101 is well-positioned, but more data from Kyverna and others are needed to understand how this dynamic evolves,” Ulz wrote in the note. “That said, we do see opportunity for differentiation in other areas, such as the selection of different indications (i.e. MS) and improved manufacturing (i.e. Ingenui-T).” Ingenui-T is a next-generation process in preclinical development for manufacturing autologous anti-CD19 CAR T-cell therapy, and uses the same CAR construct as KYV-101, Kyverna said. Ulz highlighted that Kyverna is also developing a next-generation, off-the-shelf cell therapy, KYV-201, currently in preclinical development that “could provide further differentiation” to the company’s product portfolio.