Biotech Co. Still a Buy Despite Manufacturing Setbacks
Research Report

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Disclosures for H.C. Wainwright & Co., Jasper Therapeutics Inc., July 7, 2025

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The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services. The firm or its affiliates received compensation from Jasper Therapeutics, Inc. for non-investment banking services in the previous 12 months. The Firm or its affiliates did not receive compensation from Jasper Therapeutics, Inc. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report. The Firm does not make a market in Jasper Therapeutics, Inc. as of the date of this research report. The securities of the company discussed in this report may be unsuitable for investors depending on their specific investment objectives and financial position. Past performance is no guarantee of future results. This report is offered for informational purposes only, and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such would be prohibited. This research report is not intended to provide tax advice or to be used to provide tax advice to any person. Electronic versions of H.C. Wainwright & Co., LLC research reports are made available to all clients simultaneously. No part of this report may be reproduced in any form without the expressed permission of H.C. Wainwright & Co., LLC. Additional information available upon request. H.C. Wainwright & Co., LLC does not provide individually tailored investment advice in research reports. This research report is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation and the particular needs of any specific person. Investors should seek financial advice regarding the appropriateness of investing in financial instruments and implementing investment strategies discussed or recommended in this research report. H.C. Wainwright & Co., LLC’s and its affiliates’ salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies that reflect opinions that are contrary to the opinions expressed in this research report. H.C. Wainwright & Co., LLC and its affiliates, officers, directors, and employees, excluding its analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research report. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data on the company, industry or security discussed in the report. All opinions and estimates included in this report constitute the analyst’s judgment as of the date of this report and are subject to change without notice. Securities and other financial instruments discussed in this research report: may lose value; are not insured by the Federal Deposit Insurance Corporation; and are subject to investment risks, including possible loss of the principal amount invested.

On July 7, 2025, H.C. Wainwright & Co. analyst Emily Bodnar maintained a Buy rating on Jasper Therapeutics Inc. (JSPR:NASDAQ) while lowering the price target to US$20.00 from US$40.00, representing 195% upside from the share price at the time of the report of US$6.77.

The target reduction reflects delayed timelines for chronic spontaneous urticaria and chronic inducible urticaria programs due to drug lot manufacturing issues affecting the BEACON trial.

Drug Manufacturing Issues and Trial Impact

Jasper Therapeutics disclosed that the 240 mg Q8W and 240 mg loading dose plus 180 mg Q8W cohorts in the BEACON trial evaluating briquilimab for chronic spontaneous urticaria were impacted by issues with drug product lot A349954.

The company identified the issue late last week despite the blinded trial design, noting "only modest reductions in tryptase observed and no impact on UAS7, which mimicked changes in placebo, demonstrating a lack of activity likely driven by a potency issue."

The manufacturing problem affected 10 patients who will continue dosing this week with a new drug lot, while an additional 10-12 new patients will be enrolled in these cohorts to fully evaluate dosing regimens. As a result, new data are expected in the fourth quarter of 2025, and the Phase 2b trial has been delayed to mid-2026 from the previously anticipated fourth quarter 2025 initiation.

Efficacy Results and Clinical Progress

Despite the manufacturing setback, efficacy results from unaffected cohorts remained encouraging. Among patients treated with active drug lots, 80% experienced reduction in serum tryptase below 1.6 ug/ml, and 89% achieved complete response following single doses. Bodnar noted that "CRs were durable for eight weeks, supportive of Q8W dosing, and results between both 240 mg and 360 mg appeared consistent, indicative of a maxing out on efficacy."

In the open-label extension, patients treated at 180 mg Q8W demonstrated a 73% complete response rate at 12 weeks with greater than 25-point reduction in UAS7 from baseline. The company expects up to 80 patients to be eligible for the open-label extension from BEACON and SPOTLIGHT trials.

Safety Profile and Adverse Events

The safety profile remained consistent with previous observations, with no new safety surprises reported. One new case of Grade 2 hypersensitivity occurred with a 240 mg dose, though the event "was said to have self-resolved within an hour of the first dose."

Additional adverse events included taste changes resolving within a median of 31 days and neutrophil count decline resolving within a median of 15 days, with no treatment discontinuations due to these events.

Strategic Program Adjustments

The drug lot issue also impacted the ETESIAN trial in asthma, leading to a pause in asthma development while the investigation continues.

The company has implemented cost-cutting measures, including pausing development in asthma and Severe Combined Immunodeficiency, with Bodnar estimating a 25% decline in operating expenses in the third quarter 2025.

Financial Position and Cash Runway

Jasper maintains US$48.8 million in cash with no debt and 15.0 million shares outstanding, resulting in a market capitalization of US$102 million and an enterprise value of US$53 million.

The company currently generates no revenue and reported diluted losses per share of US$4.87 for 2024, with projected losses of US$5.18 for 2025 and US$6.21 for 2026.

Based on company guidance and cost reduction efforts, Bodnar estimates the company will need to raise capital around the fourth quarter of 2025, projecting approximately US$5 million in additional funding requirements.

Valuation Methodology and Risk Assessment

The analyst's US$20.00 price target is based on a discounted cash flow analysis extending to 2040, applying a 12% discount rate with no terminal value. The valuation assumes 50% probability of success for briquilimab in chronic spontaneous urticaria and 30% probability for chronic inducible urticaria, with US launch estimates shifted to 2030 and 2031, respectively.

Key risks include potential safety signals, lower than expected efficacy, commercial competition, regulatory concerns, significant financing requirements estimated at approximately US$1.4 billion through 2040, and intellectual property protection challenges.

Investment Outlook

Despite the manufacturing setback and timeline delays, Bodnar remains optimistic about briquilimab's clinical profile based on efficacy data from unaffected patient cohorts.

The analyst emphasized that patients treated with active drug lots continue to demonstrate strong complete response rates and durable effects, supporting the therapeutic potential in chronic spontaneous urticaria treatment.