CRDL stock is very undervalued, Leede Jones Gable says

Following the release of new preclinical data, Leede Jones Gable analyst Douglas Loe remains upbeat about Cardiol (Cardiol Stock Quote, Chart, News, Analysts, Financials TSX:CRDL)

On October 10, Cardiol released what it described as positive results for cannabidiol, the active ingredient in its novel CRD-38 formulation.

“The importance of this study lies in the clinical relevance of the pre-clinical model itself, which was developed to mirror the comorbidities of hypertension, obesity, and metabolic dysfunction common to patients with heart failure with preserved ejection fraction,” CMO Dr. Andrew Hamer, said. “The results presented at the HFSA over the weekend demonstrated multiple cardioprotective effects of SUBQ administered cannabidiol and provide additional evidence in support of the development of CRD-38, our novel SUBQ formulation of cannabidiol intended for the treatment of heart failure. Furthermore, we believe our SUBQ formulation offers the potential for sustained drug release over time, allowing for less frequent administration and improved patient compliance in a chronic disease setting.”

Loe gave his breakdown of the development.

“Though Cardiol is more advanced in its testing of CBD’s anti-inflammatory cardiovascular-active activity in two other medical markets, the firm’s advances with testing a subcutaneously injectable formulation of this viscous hydrophobic agent are equally integral to our CRDL investment thesis and we ascribe tangible market value to diastolic heart failure as an addressable cardiovascular market for the firm,” the analyst argued. “As a backgrounder, the two other medical markets refer to recurrent pericarditis for which the 25-patient Phase II MAvERIC trial is enrolling patients, and acute myocarditis for which the 100-patient Phase II ARCHER trial is separately enrolling patients. Our model projects that CRD-38 could contribute 30% of our projected CardiolRx/CRD-38 royalty revenue by F2028, increasing to 43% of consolidated CardiolRx/CRD-38 royalty revenue by F2032.”

In a research update to clients October 10, Loe maintained his “Speculative Buy” rating and one-year price target of $4.50 on CRDL.