Roth Capital Cuts PT on Cerulean Pharma (CERU) to $2.50 Following CRLX101 Combo Phase 2 Data

Roth Capital cuts its price target on Buy-rated Cerulean Pharma (Nasdaq: CERU) from $9 to $2.50 after the company announced top-line results from the Company’s Phase 2, randomized, multi-center clinical trial of its lead candidate, CRLX101, in combination with Avastin (bevacizumab) in the treatment of patients with advanced renal cell carcinoma (RCC).

Analyst Joseph Pantginis commented, HIF directed studies will be terminated and the topoisomerase directed studies will become the primary focus. CERU will focus on the three remaining pillars of the combination strategy which includes chemotherapy, DNA damage repair, and immunotherapy. CERU believes that CRLX101 is an active drug because of its objective responses in topoisomerase sensitive tumors such as ovarian cancer. CERU also believes that there is synergistic antitumor activity as measured by durable objective responses in platinum resistant ovarian cancer in combination with weekly paclitaxel. CERU emphasized that the two failed trials of CRLX101, for small lung cancer and RCC, were a result of topoisomerase inhibitor insensitive tumors. The data for the trial of ovarian cancer includes 18 patients and CERU believes that this is enough data to make the decision to move on to a Phase III trial because paclitaxel alone has an ORR of 15-25% whereas CERU is observing a 56% response rate for the combination therapy, although they acknowledge that it is a small number of patients. Based on data from the Phase Ib study the FDA gave fast track designation in platinum resistant ovarian cancer. CERU has scheduled an end of Phase II meeting with the FDA for this fall to discuss the design of a pivotal study. They continue to make progress in the collaboration with AstraZeneca and the NCI where they expect to show in 1H17 that CRLX101 in combination with Lynparza is the first clinically relevant PARP/topo inhibitor combination.

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