Chiasma (CHMA) Has Enough Cash To Reach Profitability - Oppenheimer

Chiasma (NASDAQ: CHMA) reported 4Q15/FY2015, ending the quarter with $148.8M in cash, which Oppenheimer analyst, Christopher Marai, believes is sufficient to fund operations through profitability, assuming US approval. The company also announced total aggregate R&D and SG&A including stock-based comp of $80-88M. No change to Outperform rating or $43 PT.

The Phase-3 "MPOWERED" trial for an EU regulatory submission initiated. EU submission expected 2019. The trial will evaluate the non-inferiority (20% margin) of octreotide capsules to injectable somatostatin analogs as measured by the time-weighted average of patients’ insulin-like growth-factor-1 (IGF-1) levels. Study will enroll 150 patients at 50 sites in EU, US, other countries (balanced EU/ non-EU). Abstract submitted for upcoming AACE conference to shed more light on intermediate IGF-1 levels.

ENDO 2016 - April 1-4, 2016 (Boston) presentations/panels to include more data on Mycapssa patient benefit. Importantly, beyond painful injections, Mycapssa may also offer better symptom control and QoL vs currently approved products. They anticipate approval and a rapid launch; they est. that conservative penetration of ~36% into the currently treated acromegaly patient population could yield US sales >$300M in this indication alone.

US commercial preparations on track, low-risk market conversion launch in acromegaly. CHMA ests there are 8,000 patients chronically treated with somatostatin injectables, delivered by particularly long, thick needles associated with patient morbidity/burden. Chiasma is setting up high-touch sales infrastructure to guide patients through the switching process. Approximately 90% of patients are managed by 1,000 accounts, and we expect a quick launch.

NET trial of Mycapssa to begin late 2016. CHMA's technology platform to generate pipeline of similar de-risked IV-to-oral 505(b)(2)-eligible oral-peptide therapeutics. CHMA will announce its second product and initiate first-inhuman studies in 4Q16.

Mycapssa may displace incumbent injectable octreotide marketed primarily by Novartis. NVS noted on its 4Q call that it will boost acquisitions across businesses including therapeutics. Importantly, NVS is active in this space, marketing 3/5 approved somatostatin analogues, with Signifor approved in 2014.

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

Shares of Chiasma closed at $10.75 yesterday.

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