Maxim Group Starts Onconova Therapeutics (ONTX) at Buy
- Apple (AAPL) Tops Q4 EPS by 2c; Issues Solid Outlook
- Wall Street slips on earnings; Apple falls late after results
- Chipotle Mexican Grill (CMG) Posts Q3 EPS of $0.27; Comps Miss Views; Additional Stock Buyback Approved
- Pandora (P) Misses Q3 EPS by 1c, Q4 Revenue Guidance Falls Short
- After-Hours Movers 10/25: (OGXI) (AKAM) (VRTX) Higher; (EW) (NUVA) (CMG) (AAPL) Lower (more...)
Find out which companies are about to raise their dividend well before the news hits the Street with StreetInsider.com'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.
Shares of Onconova Therapeutics closed at $3.27 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- UPDATE: Chardan Capital Markets Starts Clovis Oncology (CLVS) at 'Sell' With Price Target of $15
- Jefferies Raises Price Target on Rambus (RMBS) Following 3Q Report
- Oppenheimer Raises Price Target on T-Mobile (TMUS) to $55 Following 3Q Report
Create E-mail Alert Related CategoriesAnalyst Comments, Hot New Coverage, New Coverage
Related EntitiesMaxim Group
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!