Tuesday’s Market Insights: Catalyst Biosciences Inc (CBIO), Ocean Rig UDW Inc. (ORIG)


Catalyst Biosciences Inc (NASDAQ:CBIO) is one of the most talked about stocks today. The biopharmaceutical company announced that the Korean Ministry of Food and Drug Safety (MFDS) approved its Investigational New Drug Application (IND) for CB 2679d/ISU304, a hemophilia treatment. Catalyst Biosciences shares skyrocketed over 180% to $15.25.

“We are very pleased with the progress we and our collaborator ISU Abxis have made in advancing this Factor IX candidate towards the clinic and we look forward to the initiation of a Phase 1/2 clinical trial next quarter,” said Nassim Usman, Ph.D., President and Chief Executive Officer of Catalyst. “We believe that stopping bleeding is good, but preventing bleeding is better. CB 2679d/ISU304 has the properties required, including high potency, to allow for daily subcutaneous injection with the potential to achieve stable and normal Factor IX clotting levels.”

Rodman & Renshaw Raghuram Selvaraju recently noted, “We remind investors that, based on recent approval history, only one positive pivotal trial would be needed to support a Biologics License Application (BLA) submission for the orphan indication of hemophilia. We continue to value the company’s hemostasis programs at $50M. However, our projected shares outstanding in 12 months have increased to 27M from 14M. Accordingly, our 12-month price target is now roughly $2 per share.”

Ocean Rig UDW Inc. (NASDAQ:ORIG) shares lost two-thirds of its value, after the deepwater drilling company filed for bankruptcy protection to block distressed debt investors from interfering with a debt restructuring. According to the agreement with creditors, ORIG will be deleveraged by an exchange of $3.69 billion principal amount of debt for 1) new equity of the company 2) approximately $288 million of cash and 3) $450 million of new secured debt.

Deutsche Bank Mike Urban noted, “Despite extremely low and declining utilization levels, cost cutting efforts along with a few very high priced contracts allow Ocean Rig to continue generating solid EBITDA. Despite the strong cash position, significant debt maturities and newbuild obligations on the horizon appear insurmountable and thus ORIG has begun looking at restructuring alternatives which would largely wipe out existing equity holders. ORIG took a $3.8B impairment during the quarter which significantly lowers our D&A forecast and causes our 201 7 and 201 8 estimates to improve to $1 .53 and ($1 .90) from ($0.1 6) and ($4.20), respectively.”

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