Leerink Partners Downgrades Cerulean Pharma (CERU) to Market Perform
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Leerink Partners downgraded Cerulean Pharma (NASDAQ: CERU) from Outperform to Market Perform with a price target of $1.50 (from $8.00). The change follows disappointed CRLX-101 trial results.
"We are downgrading CERU to MP following the failure of lead product candidate CRLX-101 (camptothecin nanoparticle-drug conjugate/NDC) in a randomized-controlled Phase II trial in clear-cell renal cell cancer (RCC). The results were surprising in light of the promising single-arm open-label Phase I data, as well as preclinical results supportive of the mechanism of the drug in combination with Avastin which was tested in the clinic. We now have less conviction on the clinical potential of CRLX-101 which has modest single-agent activity and are more cautious with respect to interpreting early stage single-arm combination data in other indications. CERU has $47M cash and $16.7M debt, sufficient to fund operations into 2Q17. We've removed the RCC opportunity from our valuation and increased our discount rate to 15% to reflect higher platform risk. Our new PT of ~$1.50 reflects CERU's current net cash balance, as well as probability-adjusted platform value," said analyst Michael Schmidt.
Shares of Cerulean Pharma closed at $2.74 yesterday.
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