First Berlin Equity Research has initiated coverage on Cardiol Therapeutics Inc (ISIN: CA14161Y2006). Analyst Christian Orquera’s rating is BUY with a price target of USD 3.60 (€3.30).

Abstract
Cardiol Therapeutics Inc (Cardiol) is a biotech company with a clinical-stage product pipeline focusing on cardiac diseases triggered by inflammatory processes. The lead oral drug candidate is CardiolRx?, a pharmaceutically manufactured formulation whose active ingredient is cannabidiol. Cannabidiol has shown powerful anti-inflammatory, anti-fibrotic and cardioprotective properties in multiple preclinical studies. CardiolRx?’s lead indication is recurrent pericarditis (RP – inflammation of the sac protecting the heart) for which the company is conducting a phase II open-label pilot US study in 25 patients. The company anticipates headline efficacy results in early 2024 which represent a key milestone for Cardiol. CardiolRx? is currently undergoing an international phase II study in 100 patients for a second indication, acute myocarditis (AM – heart muscle inflammation). We anticipate efficacy results in H2 2024. Both indications, RP and AM, would qualify CardiolRx? for orphan drug designation in the US and EU, giving CardiolRx? 7 years of market exclusivity upon approval. There is no approved first-line therapy for RP or AM and the performance of current standard of care, particularly in life-threatened high-risk patients, is poor. CardiolRx? has the potential to become the new standard of treatment in RP and AM. We conservatively estimate that if approved, CardiolRx? could achieve sales of >USD 470m in RP in the US and >USD 970m in AM in the US/EU. We expect positive phase II data from CardiolRx? in RP to add substantial value to the company and trigger a strong share price appreciation. We initiate coverage of Cardiol with a Buy rating and a USD 3.60 (€3.30) price target.