Recent developments in biotech stocks Cytori Therapeutics Inc (NASDAQ:CYTX) and StemCells Inc (NASDAQ:STEM) attract analysts’ attention as pipeline treatments inch toward the end of their final testing phases. Among other spectators, analyst Jason Kolbert of Maxim is optimistic and excited to report on both of the companies’ most recent testing outcomes. According to TipRanks, Jason Kolbert has a success rate of 30%, delivering an average loss per recommendation of 15%.
Cytori Therapeutics Inc
The medical company Cytori Therapeutics reached their 50% enrollment mark on their phase III STAR trial for ECCS-50, which treats the fingers and hands of patients with scleroderma (a chronic skin disease that typically occurs in hands and fingers). The company completed a treatment for the 40th patient in the trial, thus analyst Jason Kolbert of Maxim Group published a report to emphasis the importance of this milestone.
Kolbert elaborates “The STAR trial is a randomized, placebo-controlled, double-blind, parallel group pivotal study investigating the efficacy and safety of Cytori’s autologous (adipose derived) cell therapy (ECCS-50).” As mentioned, 40 out of 80 randomized patients have already been treated, and the trial is expected to be completed by mid-2016.
In addition, the company is making moves to allow use of the ECCS-50 before the official completion of the trial with a Managed Access Program (MAP). Kolbert explains, “Cytori has entered into an agreement with Idis Managed Access, part of the Clinigen Group, to establish a Managed Access Program (MAP) in select countries across Europe, the Middle East, and Africa.” He continues, “A MAP will allow Cytori, upon completion of the statutory legal and regulatory requirements, to offer patients and their healthcare providers access to ECCS-50 in advance of the product’s full marketing authorization in their respective countries.”
Kolbert reports an estimated market size of 17,000 to 149,000 potential patients in Europe and another approximation of 45,000 patients in the U.S alone. As a result of these events, the analyst reiterated a Buy rating for Cytori with a 12-month price target price of $5.00.
In addition, Maxim’s Kolbert reiterated a Buy rating on shares of StemCells with a 12-month price target of $3.00, following the company’s fourth-quarter financial results and update on its clinical progress.
According to the analyst, the biotechnology company StemCells seems to have a bright outlook by recent several events. First, StemCells reported last quarter’s spending and projected spending for the next two years for their Spinal Cord Injury (SCI) trials. Secondly, the company’s SCI treatment continues to produce promising results, as observed in their Phase II Pathway Study. Jason Kolbert weighs in with more details and his thoughts on these events.
The analyst points to the company’s financial performance and the projections for the SCI trial completion, stating, “On an adjusted basis the company spent $32M last year and projects another $50M will be spent over the next two years.. with $30M in 2016 and $20M in 2017.” Furthermore, the analyst reports that the company has $22M in cash and believes the pipeline treatments will attract attention amid recent sector acquisitions. Kolbert states, “We believe the company may be able to raise non-dilutive capital over the next year versus returning to the capital markets. We do see an infection point building in the regenerative medicine space that should be positive for the company and sector.”
With regards to the Phase II Pathway Study for the SCI treatment, Kolbert points out the recent successes among patients, which so far enrolled approximately 40 subjects. He explains, “The trial is a randomized, controlled, single-blinded study. The primary efficacy outcome will focus on change in upper extremity strength as measured in the hands, arms and shoulders.” He continues, “Based on a six-month follow-up of the first cohort, an overall pattern of motor improvement was detected in four of the six patients as measured by gains in both strength and function on the collective ISNCSCI [The International Standards for Neurological Classification of Spinal Cord Injury] and GRASSP [Graded Redefined Assessment of Strength, Sensibility and Prehension] outcomes.” Kolbert highlights other positive outcomes as well, stating, “Muscle strength was improved in five of the six patients; Four of the six patients had improvement in the spinal level of injury as defined by the ISNCSCI assessment.”