The majority of Pfenex (PFNX) investor focus has been placed on lead asset PF708, the therapeutic equivalent product candidate to Forteo, William Blair analyst Andy Hsieh tells investors in a research note, citing his talks with clients. The analyst, however, sees “potential for significant value” from the company’s collaboration with Jazz Pharmaceuticals (JAZZ). The deal with Jazz could provide patients with an alternative to Erwinaze/Erwinase, which currently suffers from significant supply constraints, and CRM197, a carrier protein that is incorporated as an adjuvant in several vaccine candidates, including Merck’s (MRK) pneumococcal vaccine, V114, Hsieh writes. Based on these royalties, the analyst conducted a sum-of-the-parts analysis for Pfenex based on discounted cash flow, and the resulting net present value yielded a value of $19.80 per share. The stock closed Monday at $4.26. The analyst believes the company’s “value-creating” catalysts this year, including milestone payment from Jazz for the successful tech transfer of PF743 and PF745 and the approval of PF708, coupled with his valuation analysis, affirm his bullish thesis. Hsieh believes Pfenex shares offer one of the best risk/reward symmetries in small-cap biotech and reiterates an Outperform rating on the name.
Monday, March 11, 2019
Seres Therapeutics announces three-year research collaboration with AstraZeneca
Seres Therapeutics (MCRB) announced a three-year research collaboration with AstraZeneca (AZN). The collaboration will focus on advancing mechanistic understanding of the microbiome in augmenting the efficacy of cancer immunotherapy, including potential synergy with AstraZeneca compounds. Under the collaboration, research will evaluate microbiome-based approaches as a predictor for which patients may respond best to certain cancer immunotherapies. Additionally, SER-401, an investigational microbiome therapeutic, may be studied in combination with AstraZeneca compounds targeting various cancers. The collaboration will apply Seres’ microbiome drug discovery and manufacturing expertise with AstraZeneca’s extensive oncology experience to evaluate the potential for microbiome therapy to improve clinical response when used in conjunction with adjunctive pharmaceutical approaches. Under the terms of the exclusive collaboration, AstraZeneca will provide Seres with $20M in three equal installments over two years, with the first payment due at the start of the agreement. In addition, AstraZeneca will also reimburse Seres for research activity related to the collaboration. Seres will maintain rights to oncology targeted microbiome therapeutic candidates, and AstraZeneca will obtain the option to negotiate for rights to those programs and other inventions arising out of the collaboration.
Conatus price target lowered to $8 from $14 at H.C. Wainwright
H.C. Wainwright analyst Ed Arce lowered his price target for Conatus Pharmaceuticals to $8 from $14 after updating his model post the company’s Q4 results. The analyst previously projected market launch for emricasan in the second half of 2021, but now adopts a “more normal, less aggressive timeline,” reflecting in part the “highly competitive environment” expected over the next few years to recruit patients for Phase 3 nonalcoholic steatohepatitis trials. Arce now anticipates market entry in the first half of 2023. He affirms a Buy rating on Conatus.
Natera partnership removes financing risk through 2020, says Piper Jaffray
Piper Jaffray analyst William Quirk says he likes the “non-dilutive funding” from Natera’s 10-year partnership agreement with BGI Genomics and believes the deal removes the company’s financing risk through at least 2020. Further, BGI is a major sequencing provider in China and this deal immediately expands Natera’s access to this large market, Quirk tells investors in a research note. This “looks like a smart deal for both parties,” says Quirk, who reiterates an Overweight rating on Natera with a $23 price target.
Stemline in-licenses worldwide rights to SL-1001
Stemline Therapeutics announced earlier today that it has exclusively licensed worldwide rights to develop and commercialize a selective small molecule rearranged during transfection kinase inhibitor from the CRT Pioneer Fund LP, a U.K. based fund manager. The RET inhibitor was designed by scientists at Cancer Research UK Manchester Institute at the University of Manchester . The preclinical compound has been designated SL-1001 and is expected to enter the clinic in 2020. “RET kinase genetic alterations have been found in a diverse range of cancers and, we believe, is a clinically validated target in multiple indications,” Stemline said in a statement. “SL-1001 is an oral RET kinase inhibitor that has demonstrated potent, selective, preclinical anti-cancer activity, both in vitro and in vivo, in RET-driven tumor models,” it added. “SL-1001 is an ideal strategic fit for us, given its targeted mechanism of action and potential for streamlined development,” commented Stemline’s CEO, Ivan Bergstein. He continued, “Building upon our team’s proven track record of success, culminating with the recent ELZONRIS approval, we intend to advance SL-1001 swiftly through the clinical and regulatory process with an eye towards achieving our goal of helping more patients succeed in their fight against cancer.”
Akorn off lows after Vox Markets blog speculates on takeover rumors
Following the collapse of Akorn’s (AKRX) agreement to be acquired by Fresenius SE (FSNUY) at eight times its current share price, the company is in an “intriguing position,” Zak Mir of Vox Markets writes in a blog post titled “Akorn: Bombed Out Price Should Attract Fresh Interest.” He writes, “Even if present rumours do not materialise, $4 plus could be a sign that the stock is ready to shake off the horrors of last year. A new CEO may also be more receptive to doing a deal with a third party than their predecessor.” Shares of Akorn bounced off the day’s lows and are no up 8c, or 2%, to $3.85.
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