Cowen Puts Stemline Therapeutics Inc’s (STML) Stock Collapse Into Perspective

Stemline Therapeutics Inc (NASDAQ:STML) was mentioned cautiously in an article by Adam Feuerstein of TheStreet. According to to the report, a patient died in a clinical trial involving STML’s lead drug candidate, SL-401. The news was not reported by the company, but confirmed by the patient’s family. In reaction, Stemline shares lost 40% of their value, as of this writing.

However, Cowen analyst Boris Peaker believes that investors are over-reacting. For reference, Ontak’s label has a black box warning for CLS and mentions cases of death due to CLS, yet the FDA did not pull the drug off the market.

“We find it reassuring that none of the four SL-401 trials have been put on clinical hold. As reference, Juno’s ROCKET study was put on clinical hold in July within approximately a week of patient deaths. Today’s article notes that this death occurred on January 18th, more than 2 weeks ago. Again, this death has not been confirmed by the company. Nevertheless, we believe that SL-401’s clinical profile to date makes it the leading CD123-targeting therapy in the clinic today,” Peaker noted.

As such, the analyst reiterates an Outperform rating on Stemline stock, without providing a price target.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Boris Peaker has a yearly average return of -0.6% and a 36% success rate. Peaker has a -0.8% average return when recommending STML, and is ranked #3300 out of 4373 analysts.

All the 5 analysts polled in the past 12 months rate Stemline stock a Buy. With a return potential of 334%, the stock’s consensus target price stands at $26.25.

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