Maxim Group Starts Onconova Therapeutics (ONTX) at Buy

August 11, 2016 8:44 AM EDT
Get Alerts ONTX Hot Sheet
Price: $2.42 -4.72%

Rating Summary:
    5 Buy, 1 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 11 | Down: 23 | New: 30
Trade ONTX Now!
Join SI Premium – FREE

Find out which companies are about to raise their dividend well before the news hits the Street with's Dividend Insider Elite. Sign-up for a FREE trial here.

Maxim Group initiates coverage on Onconova Therapeutics (NASDAQ: ONTX) with a Buy rating and a price target of $6.00.

Analyst Jason McCarthy highlighted:

  • Rigosertib is currently in a pivotal phase III study ("INSPIRE", N=225) for the treatment of high-risk MDS (Myelodysplastic Syndromes), a hematological malignancy resulting in bone marrow failure (data 2018).
  • Third time's the charm. Rigosertib has been previously evaluated in two prior phase III studies which identified a sub-population in high-risk patients where the drug was highly effective (p=0.0008) - Overall Survival (OS). As such, we see a positive skew in the current pivotal trial. We note that the company, with >$25M in cash, is funded through data.
  • The opportunity. 10,000 patients have high-risk MDS and essentially no options, thus a launch trajectory could be steep. SOC hypomethylating agents (HMAs) that fail cost $70K per patient. Pricing for Rigosertib would likely be higher, suggesting a significant market opportunity.
  • Onconova is a value play for investors. With lessons learned, the company has de-risked the pivotal INSPIRE study with the right patient population and powering. Part of the novel design includes approval on OS in either of two populations embedded in a single trial: 1) a P-value in the ITT population, or 2) a P-value in the "very high risk" population. Either of which (or both, in the best case scenario) warrants approval.
  • In addition, an oral formulation of Rigosertib in combination with SOC in the front-line setting has shown promising interim data and the complete data (near-term catalyst) is coming at ASH (December 2016), which sets the stage for a pivotal study, potentially starting in 1H17.
  • Conclusion. Onconova is a phase III company trading at a "distressed" (~$10M) valuation. The disconnect between the disappointment over prior trial failures and the current intelligent trial design creates a great opportunity for data-centric biotechnology investors. The data and market opportunity (an unmet medical need) create a positive risk/reward scenario for investors.

For an analyst ratings summary and ratings history on Onconova Therapeutics click here. For more ratings news on Onconova Therapeutics click here.

Shares of Onconova Therapeutics closed at $3.27 yesterday.

Serious News for Serious Traders! Try Premium Free!

You May Also Be Interested In

Related Categories

Analyst Comments, Hot New Coverage, New Coverage

Related Entities

Maxim Group

Add Your Comment