CTIC: Licensing Deal With Servier Incrementally Positive, Says Roth Capital

In a research report issued today, Roth Capital analyst Debjit Chattopadhyay reiterated a Buy rating on Cell Therapeutics (NASDAQ:CTIC) and raised his price target to $4.50 (from $4.00), as the company expanded its
ex-U.S. marketing muscle with a licensing deal for PIXUVRI with Servier.

Chattopadhyay noted, “CTIC will receive an upfront payment of $18.1M. CTIC is also eligible to receive milestone payments of up to $133.5M. The payments include $63.5M in potential clinical and regulatory milestone of which $12.3 million is expected upon enrollment completion of the ongoing phase 3 study. CTIC may receive up to $51.9M in potential sales milestones. CTIC is also eligible to receive tiered royalty payments ranging from low-double digit percent to mid-twenty percent, based on net sales.”

The analyst added, “While PIXUVRI could carve out a niche market, our focus remains on pacritinib, a differentiated JAK2/FLT3 inhibitor licensed to Baxter (BAXNC). Two phase 3 studies with pacritinib are underway and PERSIST-1 data is expected during 1Q15. CTIC and BAX may opt for a rolling NDA submission expected during 2H-15 We continue to recommend owning CTIC ahead of the PERSIST 1 and 2 data, model peak global sales of $1.02B (U.S. sales $519M, and ex-U.S. sales of $507M).”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Debjit Chattopadhyay has a total average return of 4.5% and a 48.3% success rate. Chattopadhyay has a -3.1% average return when recommending CTIC, and is ranked #1352 out of 3286 analysts.

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