Maxim Group Downgrades Cesca Therapeutics (KOOL) to Hold

Maxim Group downgraded Cesca Therapeutics (NASDAQ: KOOL) from Buy to Hold.

Analyst Jason Kolbert highlighted:

• We are worried about Cesca. Our projections suggest that the company has yet to find a "white knight," either an anchor investor or a partner who will provide the capital to fund the "pivotal" trial in CLI. So, while we believe in the product and the technology, we are concerned that no suitor may arrive, or at least that we have no such visibility. As a result, we believe it is prudent to lower our rating to Hold from Buy, and, as such, eliminate our price target, which, without funding, becomes irrelevant.
• The challenge for Cesca now is to raise capital to move forward with the PII/III pivotal trial. Recall that, at the start of the month, CIRM (California's Institute for Regenerative Medicine) said "no" to Cesca's grant application. Recall also that the company's critical second tranche of financing was dependent upon this grant. We are hopeful that there is some negotiating room, but we have no visibility.
• We estimate the company had ~$6.5M at last quarter's close. We reduced our burn rate assumptions, and, based on this, we see 4-6 months of runway to find a partner.
• The company has hired a banker (Mavericks Capital) to explore strategic partnerships and licensing arrangements as a pathway to move forward.

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

Shares of Cesca Therapeutics closed at $0.22 yesterday.

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