CytRx ($CYTR): Oncology Value Play ? Cowen thinks so...
CytRx Corporation (NASDAQ: CYTR): An Oncology Focused Small Molecule Biotech Play:
The CytRx oncology pipeline includes three programs in clinical development for cancer indications: INNO-206, tamibarotene and bafetinib.
With its tumor-targeted doxorubicin conjugate INNO-206, CytRx has initiated an international Phase 2b clinical trial as a treatment for soft tissue sarcomas, is completing its ongoing Phase 1b/2 clinical trial and plans to initiate a Phase 2 trial for an undisclosed solid tumor indication in the first half of 2012.
CytRx's pipeline also includes tamibarotene, which it is testing in a double-blind, placebo-controlled, international Phase 2b clinical trial in patients with non-small-cell lung cancer, and which is in a clinical trial as a treatment for acute promyelocytic leukemia (APL).
The Company is evaluating bafetinib in the ENABLE Phase 2 clinical trial in high-risk B-cell chronic lymphocytic leukemia (B-CLL), and plans to seek a partner for further development of bafetinib.
In 2011, CytRx completed its strategy of monetizing its non-core assets through the sale of its molecular chaperone technology to Denmark-based Orphazyme ApS in a transaction valued up to $120 million, the sale of its 19% interest in SynthRx to ADVENTRX Pharmaceuticals, and the disposition of its remaining shares of RXi Pharmaceuticals in a series of transactions that provided CytRx with approximately $17 million in non-dilutive financing.
Cowen Highlights their Investment Thesis: CyTRx: A three-compound oncology company (aka Innovive Pharmaceuticals but three years later, with different management, more data and a lot more cash). CYTR is financed through important data points that will provide answers questions about its pipeline
According to Cowen: Three Phase II oncology compounds for a total EV of ~$30M make for a favorable risk/reward:
- Compound #1: INNO-206: a targeted doxorubicin prodrug with platform potential...but, first, show me the data!
- Compound #2: Tamibarotene: Trying to be ATRA 2.0; Issues: 1) APL is a miniscule market, 2) belief in NSCLC requires some extrapolation, and 3) weak IP position.
- Compound #3: Bafetinib: a novel, oral, Bcr-Abl and Lyn kinase dual inhibitor; pathways involved are compelling, but safety and competition is a concern.
cytr | Print Article Email Article Posted on Tuesday, March 13, 2012 at 9:55PM Permalink in Oncology