Biotech company Cardiol Therapeutics (Cardiol Therapeutics Stock Quote, Chart, News, Analysts, Financials TSX:CRDL) is flirting with all-time lows but Raymond James analyst Rahul Sarugaser is staying bullish on the stock, reiterating an “Outperform 2” rating and $5/share target price in an update to clients on February 3. Founded in 2017 and headquartered in Oakville, Cardiol Therapeutics is a clinical-stage biotechnology company focused on producing pharmaceutical cannabidiol (CBD) products, specifically by developing anti-inflammatory therapies for the treatment of cardiovascular disease. Sarugaser’s latest update comes as Cardiol continues its work on a pair of clinical programs Sarugaser views as important for the company’s success. The first trial, the Phase 2 LANCER trial, is an FDA-registered, randomized, double-blind, placebo-controlled clinical trial designed to investigate the safety and cardioprotective properties of CardiolRx, a pharmaceutically produced, orally administered CBD in patients hospitalized with COVID-19 who also have a prior history of, or risk factors for, cardiovascular disease. Initially conducted in nine medical centres in the United States, the LANCER trial expanded to include patients in Brazil, Canada and Mexico in late 2021, with clinical site activation well underway in all three countries. The first of 422 patients to be treated under the LANCER trial was treated in April 2021, and Sarugaser expects the trial to conclude within the next month or two, with the aim of reaffirming CardiolRx’s cardioprotective efficacy ahead of potential U.S. Food and Drug Administration approval and/or emergency use authorization in patients with COVID-19 and cardiovascular disease. According to Sarugaser, the trial will be the first real test of the drug's efficacy in a human population, making the impending data readout a critical event for Cardiol’s prospects. “COVID-19 remains an international crisis and there remains an urgent need to develop new therapeutics to address the immune-mediated inflammation that results from the virus, particularly in high-risk patients with cardiovascular disease,” stated Dr. Guillermo Torre-Amione, Chairman of Cardiol Therapeutics in an October 18 press release announcing the expansion. “With the expansion of the LANCER trial to include prominent clinical research centers in Brazil, Mexico, and Canada, we are now positioned to accelerate patient recruitment into the trial and expedite the path towards our goal of determining the cardioprotective properties of CardiolRx in COVID patients with pre-existing, or significant risk factors for, cardiovascular disease.” The second of Cardiol’s key trials is also at Phase 2, this one for patients with acute myocarditis (AM), a condition noted by the inflammation of heart tissue. At the moment, acute myocarditis does not have a set standard of care, and it remains the most common cause of sudden cardiac death in people under 35 years. According to Sarugaser, there are an estimated 33,000 cases of acute myocarditis every year in the United States, with another estimated 45,000 annually in the European Union, key numbers as they give acute myocarditis Orphan status in both locales. In August, Cardiol received U.S. FDA to proceed with a Phase II, multi-center, randomized controlled trial of CardiolRx among 100 acute myocarditis patients, with Health Canada granting its approval in October. “CRDL coordinating the AM trial with LANCER is, in our view, a rather brilliant strategy, as positive data from LANCER would serve to de-risk CRDL's parallel trial in AM (many COVID-19 patients present with AM; AM is essentially virus-catalyzed inflammation in the heart),” Sarugaser said. “Conversely, negative results from LANCER would have negative implications for CRDL’s Phase 2 trial in AM.” From a financial perspective, Cardiol closed a US$50 million public offering consisting of over 16 million units at a value of $3.07 per unit. According to Sarugaser, Cardiol intends to use at least US$4 million from those proceeds to complete preclinical development of a subcutaneous CBD formulation for treatment of chronic heart failure, which represents the leading cause of death and hospitalization in North America, with an aim of getting more information later in 2022 or early in 2023. Cardiol has yet to reach the revenue generation phase of its growth strategy, though Sarugaser does produce EV/Revenue multiple projections for the company with a figure of 269.6x in 2020, dropping to a projected 146.5x in 2021 before diving even further to a projected 37.3x in 2022. Meanwhile, with continued research and development on the go, Sarugaser continues to forecast losses in the company’s EBITDA, setting an estimate of a $24 million loss to end the 2021 fiscal year, followed by a $23 million loss projection in 2022. Cardiol’s stock price has cratered to a 50.2 per cent loss over the last 12 months, though the loss in 2022 has been limited to 3.5 per cent. The stock’s value has largely slid since reaching a 52-week high of $6.03/share on September 27, though it briefly spiked back up in October; most recently, Cardiol hit a 52-week low of $2.12/share on January 13. At press time, Sarugaser's $5.00 target represented a projected one-year return of 119.3 per cent.