Headline grabbing biotechs are far from a rare sight in 2020. Nevertheless, when a little-known micro-cap pops by 730% in a single trading session, avid market followers are likely to take notice.And so to Equillium (EQ), the aforementioned little known biotech, whose shares blasted off on Monday.The rally began following the announcement that the Drugs Controller General of India – India’s equivalent of the FDA – granted Equillium’s partner Biocon emergency approval for itolizumab, a treatment of cytokine release syndrome (CRS) in COVID-19 patients with acute respiratory distress syndrome (ARDS). The approval came following a 30-patient proof-of-concept trial in which the drug reduced mortality in hospitalized COVID-19 patients (all patients given the drug survived).The drug is currently being developed as a treatment for various autoimmune and inflammatory diseases. However, Equillium now plans to file an investigational new drug (IND) application so it can proceed with a clinical trial of itolizumab in COVID-19 patients in the US.H.C. Wainwright analyst Ram Selvaraju believes progress could be fast once the wheels are set in motion.“In our view,” said the 5-star analyst, “itolizumab could be developed rapidly using a similar trial design in a larger patient group—perhaps no more than 200-400 subjects—with a randomized, double-blinded, controlled approach. Such a trial program in the U.S. could be accomplished involving only 10-12 centers and might cost under $10M to execute. If started in the next several weeks, we believe such a trial could yield results in early 4Q20 and facilitate either accelerated approval or Emergency Use Authorization from the FDA before year-end.”Selvaraju estimates that the “penetration rate” in the U.S. for the treatment won’t exceed 3.5%, as the patients eligible to receive itolizumab – those with specific types of immunological and respiratory complications – make up less than 15% of all COVID-19-infected patients.The analyst reckons the treatment will sell for approximately $1,750 per course, and could notch “potential peak sales of over $500 million in the U.S. market by 2022,” after which sales are expected to decline as the pandemic gradually retreats.To this end, Selvaraju boosts his price target on EQ to $24 (from $14), which implies about 70% upside from current levels. (To watch Selvaraju’s track record, click here)Only one other analyst has posted an EQ review over the last 3 months, also recommending a Buy. (See Equillium stock analysis on TipRanks)To find good ideas for healthcare stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.