Neutral on Cell Therapeutics - Analyst Blog
June 23 2011 - 11:32AM
Zacks
We are maintaining a Neutral recommendation on Cell
Therapeutics Inc. (CTIC) with a target price of $2.25.
Cell Therapeutics Inc. based in Seattle, Washington, is focused
on developing drugs for cancer. The company’s lead pipeline
candidate, pixantrone, is being developed for the treatment of
hematologic malignancies and solid tumors.
In December 2010, Cell Therapeutics filed an appeal against the
decision of the FDA in April 2010 to deny approval to pixantrone
for the treatment of relapsed, aggressive non-Hodgkin's lymphoma,
or NHL, in patients who have not responded to other treatment
options. The approval was denied due to concerns that the late
stage trial PIX301 (which formed the basis of the NDA filing) had
not sufficiently proved the effectiveness of the drug.
The FDA asked Cell Therapeutics to conduct an additional trial
to determine the safety and efficacy of pixantrone. Cell
Therapeutics met with the FDA Office of New Drugs (OND) in May 2011
which allowed it to re-submit the NDA for pixantrone without the
need for an additional trial.
The OND recommended Cell Therapeutics will have to conduct an
additional independent radiologic review utilizing a new
independent panel of radiologists of the PIX301 trial to determine
the soundness of the primary endpoint. The company will also submit
new information regarding circumstances of stopping the PIX 301
trial early.
In June 2011, the company received guidance on how to proceed
with the resubmission from the Division of Oncology Drug Products
(the DODP). The DODP focused on the information which the company
proposes to submit and on the composition of the new radiology
expert panel.
The DODP will review the NDA within 6 months of the
resubmission. Cell Therapeutics will submit the additional
information later in 2011 and anticipates receiving approval in the
first half of 2012.
The decision from the OND has removed a major overhang for Cell
Therapeutics and revived the prospects of pixantrone. The company
has been saved 2-3 years time by getting the opportunity to file on
the basis of the original completed trial, PIX301, instead of the
new trial, PIX306, which the company began in March 2011.
The company has also filed a Marketing Authorization Application
(MAA) for the candidate in Europe. The drug is expected to be
approved in EU in 2011. Approval of the drug in the Europe will
boost Cell Therapeutics’ top-line and provide it with some much
needed funds.
The company’s other late stage oncology pipeline candidate,
which includes Opaxio (being studied for the treatment of ovarian,
esophageal and brain cancer) and tosedostat ((being studied for
hematopoietic cancers such as acute myeloid leukemia (AML),
myelodysplastic syndrome (MDS) and multiple myeloma (MM)), will be
synergistic with pixantrone.
The company has a global licensing deal with
Novartis (NVS) for Opaxio and will receive
substantial royalty payments from Novartis once the drug is
approved. Tosedostat has demonstrated encouraging responses as a
single agent therapy in treating hematopoietic cancers such as AML,
MDS, and myeloma which resonates well with Cell Therapeutics’
experience.
However, we prefer to remain on the sidelines as Cell
Therapeutics is heavily dependent on the approval of pixantrone.
Therefore, any delay in gaining approval would be a major blow for
the company.
Even if pixantrone gains approval it will face tough competition
from several established products in the market. One of the
top-selling drugs for the treatment of NHL is
Biogen/Roche’s (BIIB/RHHBY) Rituxan. Other
competing products include Sanofi Aventis’ (SNY)
Campath, Takeda’s Velcade and Cephalon's (CEPH)
Treanda.
BIOGEN IDEC INC (BIIB): Free Stock Analysis Report
CEPHALON INC (CEPH): Free Stock Analysis Report
CELL THERAPEUT (CTIC): Free Stock Analysis Report
NOVARTIS AG-ADR (NVS): Free Stock Analysis Report
SANOFI-AVENTIS (SNY): Free Stock Analysis Report
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