Cerulean Pharma Inc (NASDAQ:CERU) investors are overwhelmingly excited today after the company announced two positive developments. First, Cerulean announced that it has entered into a $20 million purchase agreement with Aspire Capital Fund, under which Aspire bought 800K shares of common stock at $1.25, nearly 84% from yesterday’s closing price. Second, Cerulean has entered into a strategic collaboration with Novartis to develop nanoparticle-drug conjugate product candidates for up to five targets. Under the terms of the agreement, Cerulean will receive an upfront payment of $5 million plus funding for five full-time equivalents. It will also be eligible for milestones and single-digit-to-low-double-digit royalties on net sales.
Cerulean shares reacted to the news, jumping nearly 55% to $1.08 in early trading Wednesday.
“This agreement with Aspire provides us access to capital to support our ongoing clinical efforts,” said Christopher D.T. Guiffre, President & CEO of Cerulean. “Our relationship with Aspire allows us to strengthen our balance sheet over time without banking commissions or warrants. Controlling the timing and amount of common stock being sold is key, as we can use this facility to opportunistically strengthen our balance sheet without unnecessary dilution as we advance our CRLX101 and CRLX301 programs. Aspire has been a longtime shareholder, and we appreciate their continued support.”
The CEO continued, “Novartis is widely recognized as one of the world leaders in drug development […] This collaboration is further validation of our powerful technology platform, and we are excited that Novartis is including NDCs in its drug discovery and development efforts. We are pleased to have the opportunity to contribute to Novartis’ pipeline, and we believe that partnering with them will help accelerate our efforts to provide safer and more effective options to cancer patients.”
On the ratings front, Cerulean Pharma has been the subject of a number of recent research reports. In a report issued on August 30, Barclays analyst Jonathan Eckard reiterated a Buy rating on CERU, with a price target of $2.00, which represents a potential upside of 194% from where the stock is currently trading. Separately, on August 19, Canaccord Genuity’s John Newman reiterated a Buy rating on the stock and has a price target of $6.00
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Jonathan Eckard and John Newman have a total average return of -5.9% and -11.5% respectively. Eckard has a success rate of 35% and is ranked #3707 out of 4180 analysts, while Newman has a success rate of 35% and is ranked #4063.
Overall, 2 research analysts have assigned a Hold rating and 2 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $1.50 which is 120% above where the stock closed yesterday.
Cerulean Pharma, Inc. is a clinical-stage, oncology-focused company, which provides proprietary Dynamic Tumor Targeting Platform to develop differentiated therapies. It specializes in the design and development of nanopharmaceuticals. Cerulean’s nanopharmaceuticals are drug-containing nanoparticles designed and optimized to enhance therapeutic agents, ranging from small molecules to therapeutic peptides and RNAi molecules.