Brean Capital Reaffirms Buy On MEI Pharma Following Fiscal 2014 Results


In a research note released yesterday, Brean Capital analyst Jonathan Aschoff reaffirmed a Buy rating on MEI Pharma (NASDAQ:MEIP) with a $16 price target. The report follows the company’s fiscal 2014 results, which were released yesterday. 

Aschoff wrote, “MEI ended its fiscal 2014 with $49 million in cash, which should be sufficient to fund its operations for at least the next 12 months. MEI reported no revenue and GAAP EPS of $(1.35) for its fiscal year 2014, respectively, in line with consensus. Due to MEI’s early stage of development, our investment thesis is not affected by variations in quarterly results over the near term. In fiscal 4Q14, GAAP R&D expense was $6.4 million, and GAAP SG&A expense was $2.1 million.”

Furthermore, the analyst said, “MEI earlier reported encouraging Phase 2 results in the first 9 patients, where 3 CR/CRi and 3 PR/PRi were reported, representing an overall response rate of 67%. The Phase 2 trial of pracinostat for front-line MDS will read out top-line results in 1Q15. Recall that the trial has recently been fully enrolled with 108 patients randomized 1:1 to receive pracinostat or placebo in combination with Vidaza. In May, MEI initiated an open-label Phase 1b trial of ME-344 plus Hycamtin for small cell lung and ovarian cancers. The Phase 1b trial will enroll up to 64 patients, with initial data expected by 2Q15. Previously, ME-344 single agent treatment resulted in SD or better in 8 of 21 evaluable patients (38%), including one patient achieving PR and remaining on ME-344 for more than 2 years. DLTs were reported at both the 15 and 20mg/kg dose levels, consisting primarily of Grade 3 peripheral neuropathy. Following the acquisition of global rights to PWT143, a selective PI3K delta inhibitor, MEI expects to file an IND for this drug candidate by YE14. MEI ended its fiscal 2014 with $49 million in cash, which should be sufficient to fund its operations for at least the next 12 months. MEI reported no revenue and GAAP EPS of $(1.35) for its fiscal year 2014, respectively, in line with consensus.”

 According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Jonathan Aschoff has a total average return of 19.2% and a 59% success rate. Aschoff is ranked #148 out of 3291 analysts.

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