Healthcare analysts are weighing in today on leukemia drug maker Celator Pharmaceuticals Inc (NASDAQ:CPXX) and biotechnology company StemCells Inc (NASDAQ:STEM), as the stocks turned extremely volatile following acquisition news, and termination of a clinical study, respectively. Let’s take a closer look.
Celator Pharmaceuticals Inc
Celator shareholders celebrate a 71% gain in the stock following the news that Jazz Pharmaceuticals had agreed to buy Celator for $30.25 a share – a total value of $1.5 billion.
In reaction, Roth Capital analyst Joseph Pantginis downgraded the stock from a Buy to a Neutral rating, with a price target of $30.25.
Pantginis noted, “Following the first Phase III study to show a survival benefit in decades with Vyxeos, we believe this is a fitting culmination to the Celator story. We also look forward to future visibility out of Jazz regarding progress from the CombiPlex platform and new therapeutic candidates. Recall Vyxeos was also recently awarded Breakthrough Therapy designation by the FDA. Jazz expects the transaction to be accretive in 2018.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Joseph Pantginis has a yearly average return of 0.2% and a 38% success rate. Pantginis has a 292% average return when recommending CPXX, and is ranked #2067 out of 3972 analysts.StemCells Inc
Today has been nothing short of a nightmare for shareholders of StemCells. StemCells’ shares are down over 80% following the news that the company will terminate its Phase II Pathway Study in spinal cord injury (SCI).
Reacting was Maxim analyst Jason Kolbert, which downgraded the stock from Buy to Hold, while removing his prior price target of $3.00.
Kolbert commented, “The company recently decided not to pursue the dry AMD study, leaving the SCI study as the principal performance driver. With the study now halted the company is in limbo, as the clinical requirements (based on the signal) call for a larger study outside the scope of the company’s ability to finance it ($5.5M in cash remaining). We have calls into management but have not yet spoken with them; given the news, we are downgrading our rating to Hold, from Buy. We are also removing our previous $3.00 price target. The stock price has now fallen to $0.60 (market capitalization of $7M), and it’s not clear what residual value (IP) remains.”
According to TipRanks.com, analyst Jason Kolbert has a yearly average return of -14.1% and a 31% success rate. Kolbert has a -43.5% average return when recommending STEM, and is ranked #3889 out of 3972 analysts.