Monday’s Market Insights: Cellect Biotechnology Ltd. (APOP), Foamix Pharmaceuticals Ltd (FOMX)

Cellect Biotechnology Ltd. (NASDAQ:APOP) shares skyrocketed over 70% today after the company announced that the first stem cell transplant procedure has been successfully performed using its ApoGraft™ technology in the Company’s Phase I/II clinical trial in a blood cancer patient.

Dr. Shai Yarkoni, Cellect’s CEO said, “After 15 years of research, this is the first time we have used our technology on a cancer patient suffering from life-threatening conditions. It is a first good step on a road that we hope will lead to stem cell based regenerative medicine becoming a safe commodity treatment at every hospital in the world.”

H.C. Wainwright Ram Selvaraju also commented, “Acute GvHD occurs in 40-50% of allogeneic HSCT recipients. If Cellect’s approach can obviate GvHD risk, it could spur adoption of allogeneic HSCT and permit patients with deadly leukemias and lymphomas to undergo remission without GvHD-induced, possibly fatal autoimmune reactions. In our view, use of ApoGraft™ in allogeneic HSCT could generate peak annual sales of $250M by 2030. According to our estimates, the market has an annual value of $8.5B, based on current HSCT per-procedure cost estimates of $125K.” Selvaraju rates APOP a Buy with a $10.00 target price per American Depositary Share (ADS).

Foamix Pharmaceuticals Ltd (NASDAQ:FOMX) investors are running for the hills, sending the stock down 45%. What’s the reason for the panic? The drug maker has disclosed that its acne drug, FMX101, failed to meet one of two main goals in a Phase 3 study.

However, Guggenheim analyst Louise Chen still sees a path forward for FMX101, noting, “The results were also fairly consistent and reproducible. It is still too early for FOMX to determine why it missed the IGA endpoint for the 04 trial. FOMX is digging into the details site by site to further understand the data. The two trials are still ongoing in their open label Phase. FOMX cannot say yet if it will need to conduct an additional study to get approval for FMX101. The studies are not that costly and we estimate FOMX has sufficient capital on hand to fund operations through mid-’19. We would also note that IGA is a tougher endpoint than lesion count since it’s a subjective measure. FOMX plans to provide an update on next steps as soon as it finishes its analysis of the data. We think management understands the sense of urgency here.”

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Louise Chen has a yearly average return of -15.3% and a 33% success rate. Chen has a 11.5% average return when recommending FOMX, and is ranked #4452 out of 4554 analysts.

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