Janney Reiterates Buy On CTI BioPharma Following Collaboration Agreement With Servier

In a research note published today, Janney Capital analyst Kimberly Lee maintained a Buy rating on Cell Therapeutics (NASDAQ:CTIC) with a $4 fair value, following collaboration agreement with Servier to develop and commercialize PIXUVRI. The companies intend to expand development of PIXUVRI into various NHL and multiple myeloma indications in combination with monoclonal antibodies.

Lee noted, “The transaction is valued at approximately $133.5M. In exchange for exclusive commercialization rights in additional ex-US geographies, CTIC received an upfront $18M payment and will receive up to $63M in regulatory/clinical milestones ($12M tied to PIX306 enrollment), $52M in potential sales milestone payments and tiered royalty payments in low double-digit to mid-twenties on net sales in Servier’s territories. The arrangement also includes a 50-50 development cost split.” 

The analyst added, “We recommend CTIC shares based on the market expansion potential for PIXUVRI, pacritinib’s safety profile, meaningful market opportunities in lymphoma and myelofibrosis, near-term milestones and attractive valuation. Our $4 fair value estimate is based on a discounted cash flow analysis that examines free cash flow through 2021.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Kimberly Lee has a total average return of 7.8% and a 54.3% success rate. Lee has a -18.7% average return when recommending CTIC, and is ranked #897 out of 3301 analysts.

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