Roth Capital Affirms Aptose Biosciences (APTO) at 'Buy'; Clinical Hold Update Disappointing, But Positives Remain

Roth capital affirms Aptose Biosciences (Nasdaq: APTO) at Buy with a price target of $8 after the company announced that it received a response from the U.S. Food and Drug Administration (FDA) regarding the clinical hold of Aptose’s Phase 1b clinical trial of APTO-253 in patients with hematologic cancers requesting additional information and informing Aptose that the hold would not be removed until this information is submitted and reviewed.

Analyst Joseph Pantginis commented, While the announcement of a question and further delay to removing the clinical hold is disappointing and drives negative perception, we highlight the following: 1) no new hurdle has been given to the company by the FDA, 2) the request is a standard CMC question regarding GMP of the new formulation and 3) we believe it continues to reduce overall risk to the new formulation as we continue to expect removal of the hold later this year. Recall the company also hopes that the FDA will allow (no discussion yet) the study to resume at the 100 mg/m2 dose level, which management believes is the dose just starting to enter the therapeutic window for APTO-253. As the path to removing the clinical hold looks like it is coming to an end with a positive resolution, important pipeline progress is occurring. CG-806 should enter clinic in mid-2017. The clinical program could initially look at relapsed/refractory AML and Imbruvica refractory CLL patients.

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