First Berlin Equity Research has published a research update on Cardiol Therapeutics Inc. (ISIN: CA14161Y2006). Analyst Christian Orquera reiterated his BUY rating and maintained his USD 3.60 price target.

Abstract
Cardiol Therapeutics has published its H1 2023 financial report. Overall figures were in line with our expectations. The company reported EBIT of CAD -14.1m (FBe: CAD -14.3m; H1 2022: CAD -19.0m). The net loss came in at CAD -14.6m (FBe: CAD -14.0m; H1 2022: CAD -15.4m). The cash position declined by CAD 14.6m to CAD 44.9m (YE 2022: CAD 59.5m) but is sufficient to fund operations into 2026. Importantly, both CardiolRx’s core programmes in recurrent pericarditis (RP) and acute myocarditis (AM) are on track. At a recent US investor conference, management confirmed that all 8 US clinical sites for RP are actively recruiting and we expect 50% of the total planned patient recruitment will be completed in the next few weeks. We thus believe there is a good chance that Cardiol could positively surprise investors ahead of the full trial results due early next year. Similar to Kiniksa Pharmaceuticals‘ approval process for its approved drug Rilonacept (Arcalyst), if efficacy results for the first 50% or ~12 patients are positive, we expect management to meet with the FDA in Q4 2023. The aim of the meeting will be to gain permission (as received by Kiniksa) to immediately initiate a phase III trial. The ensuing announcement of the start (in early 2024) of a phase III study would be a great catalyst for the stock. Regarding the ongoing multinational AM study, management mentioned that it has completed enrolment of >35 clinical sites (plan: 25-35) and recruitment is progressing ahead of schedule. We anticipate Cardiol achieving 50% recruitment in early 2024, 100% recruitment in early Q3 2024 and headline results in H2 2024 (FBe: H2 2024 – H1 2025), which is good news. Last but not least, following positive share price development, Cardiol announced that on 7 August 2023 the firm had regained compliance with the minimum bid price requirement under Nasdaq Listing Rules for continued listing on Nasdaq Stock Exchange. We continue to believe that Cardiol is substantially undervalued. We reiterate our Buy recommendation and price target of USD 3.60 (€3.30).