Maxim Positive on Onconova Therapeutics (ONTX) Following Q2 Report; Notes Accelerating INSPIRE Enrollment

August 15, 2016 2:53 PM EDT
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Price: $2.40 --0%

Rating Summary:
    5 Buy, 1 Hold, 0 Sell

Rating Trend: Up Up

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    Up: 0 | Down: 0 | New: 0
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Maxim affirms Onconova Therapeutics (NASDAQ: ONTX) at Buy with a price target of $6 following Q2 results and update issued Monday.

Analyst Jason McCarthy noted the following key points today:

  • Onconova reported 2Q16 with revenues of $2.2M and a net loss of $5.4M. The company ended the period with $12.8M in cash. Combined with net proceeds of $15.8M from a July financing, Onconova has $27.6M in cash on the balance sheet, sufficient capital to fund the remainder of the phase III pivotal study of Rigosertib in high-risk MDS (Myelodysplastic Syndromes, "INSPIRE", data expected 2018).
  • INSPIRE (N=225) enrollment continues to accelerate as nearly two-thirds of the expected 135 sites are now on-line. Enrollment is expected to complete in 2017 and an interim look at the data (88 events) is expected in 2H17.
  • Conclusion. We see Onconova as funded across multiple inflection (data) points over the next year. The stock is trading at a "distressed" valuation, stemming from a disconnect between prior study failures and the current intelligent trial design. As such we believe Onconova remains a good value play for investors.

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