Calithera Biosciences, Inc. (NASDAQ: CALA) is a clinical-stage pharmaceutical company focused on discovering and developing novel small molecule drugs directed against tumor metabolism and tumor immunology targets for the treatment of cancer.
The company released its quarterly earnings results on Nov 2nd. In the quarter, Calithera advanced each of its internally discovered first-in-class, small molecule onco-metabolism clinical candidates. More specifically, it initiated two new phase 2 trials with its oral glutaminase inhibitor and recently initiated dosing of oral arginase inhibitor in combination with a checkpoint inhibitor.
Company’s clinical development plans are progressing fast and it plans to present clinical updates on CB-839, including the initial results of CB-839 dosed in combination with Bristol Myers Squibb’s Opdivo® (nivolumab) at the Annual Meeting of the Society for Immunotherapy of Cancer (SITC), which is being held from November 10-12, 2017. On the corporate front, In September 2017, Calithera appointed Blake Wise, President and Chief Operating Officer of Achaogen, to the company’s Board of Directors.
Markets are now looking to the Presentation at SITC, wherein CALA will present clinical trial results from CB-839 dosed in combination with Opdivo® (nivolumab) in patients with advanced melanoma, renal cell carcinoma or non-small cell lung cancer. Furthermore, the company will also host a clinical update webcast on Saturday, November 11th, 2017.
These are the potential upside catalyst for the company and, if this news hits press favorably, the stock of the company will be on a rapid growth trajectory. Even if it misses, the subsequent dip in share price will serve as an option to make a position for the eventual upside run.
CALA is a relatively safer biotech play, with ample potential offtake opportunities, the new approach to cure tumors, and wide indication treatment applications for CB-839 and CB-1158. Moreover, collaborations with Brystol and Incyte validates the science by top oncology players.
Several equities research analysts recently issued favorable reports on CALA shares. The company currently has an average rating of “Buy” and an average price target of $21.50.
About the company: Calithera is discovering and developing novel small molecule drugs directed against tumor metabolism and tumor immunology targets for the treatment of cancer. It is headquartered in South San Francisco, California.
- CB – 839: Calithera’s lead product candidate, CB-839, is a potent, selective, reversible and orally bioavailable inhibitor of glutaminase. CB-839 takes advantage of the pronounced dependency many cancers have on the nutrient glutamine for growth and survival.
- Present Stage: It is currently being evaluated in Phase 2 clinical trials in combination with standard of care agents.
- INCB01158: is a first-in-class immuno-oncology metabolic checkpoint inhibitor targeting arginase, a critical immunosuppressive enzyme responsible for T-cell suppression by myeloid-derived suppressor cells. Arginase depletes arginine, a nutrient that is critical for the activation, growth, and survival of the body’s cancer-fighting immune cells, known as cytotoxic T-cells.
- Present Stage: INCB01158 is being developed in collaboration with Incyte Corporation and is currently in a Phase 1 clinical trial.
Anticipated near term milestones:
- Presentation of CB-839 Phase 1 Opdivo combination data
- Presentation of CB-839 Phase 1b combination data in triple negative breast cancer 4Q2017
- Presentation of CB-839 Phase 1b combination data in renal cell carcinoma early 2018
Other recent highlights:
- Initiated Randomized Phase 2 Combination Trial in Renal Cell Carcinoma: In August 2017, CALA initiated a randomized, double-blind, placebo controlled trial to evaluate the safety and efficacy of CB-839 in combination with everolimus versus placebo in approximately 250 patients with metastatic, clear cell renal cell carcinoma who have been treated with at least two lines of prior systemic therapy including a VEGFR-targeting tyrosine kinase inhibitor and at least one of either CABOMETYX™ (cabozantinib) or an active PD-1/PD-L1 inhibitor. The primary endpoint of this trial is progression-free survival, and CB-839 has been granted Fast Track designation for this indication.
- Initiated Phase 2 Trial in Triple Negative Breast Cancer. In July 2017, CALA initiated a Phase 2 trial of CB-839 with paclitaxel in patients with triple negative breast cancer patients. Four single arms, open-label, cohorts of African American and non-African American patients will be treated in both the early stage setting, where patients have no prior treatment for metastatic disease, as well as the late stage setting, after at least two prior therapies for metastatic disease including prior taxane therapy. The primary endpoint of this trial is objective response rate. Additional data from the triple negative breast cancer development program are expected in the fourth quarter.
- INCB01158 – Initiated Combination Dosing. In October 2017, the first patient was treated in the Phase I cohort of INCB01158 (formerly known as CB-1158) dosed in combination with Keytruda® (pembrolizumab), an anti-PD1 immune checkpoint inhibitor.
3rd Quarter 2017 Financial Results:
- Cash, cash equivalents, and investments totaled $196.5 million at September 30, 2017.
- Revenue was $7.3 million for the three months ended September 30, 2017, and represents the portion of deferred revenue recognized in the third quarter from the company’s collaboration and license agreement with Incyte.
- Research and development expenses were $10.8 million for the three months ended September 30, 2017, compared with $6.3 million for the same period in the prior year. The increase of $4.5 million was due to an increase in the CB-839 program to support new and ongoing clinical trials, including the company’s two Phase 2 trials which began in the third quarter of 2017, as well as investment in early-stage research programs, offset by decreases in the INCB01158 program, primarily due to Incyte’s co-funding of development costs.
- Net loss from operations for the three months ended September 30, 2017, was $6.1 million, or $0.17 per share.
Key risk factors and potential stock drivers:
The company is optimistic about the positive outcome of the SITC meeting. This meeting will be a critical catalyst for the company going forward.
Notwithstanding promising data and partnerships, CALA does not have a product yet approved by FDA. There is a risk that their potential drugs might fail during the clinical trials.
The outcome of the upcoming milestones/catalysts could be the near-term trigger for the company. Any non-favorable developments could impinge the business and financial risk profile of the company.
The company may experience financial, regulatory, or operational difficulties, which may impair its ability to commercialize their drug products.
On Friday, November 3rd, 2017, CALA closed at $17.20 on an above average volume of 510,507.00
Shares exchanging hands. Market capitalization is $610.20 million. The current RSI is 55.92
In the past 52 weeks, shares of CALA have traded as low as $2.50 and as high as 20.05
At $17.20, shares of CALA are trading above its 50-day moving average (MA) at $16.24 and above its 200-day MA at $13.65 as well.
The present support and resistance levels for the stock are at $16.40 & $17.95 respectively.
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