CASI Pharmaceuticals Inc, (NASDAQ: CASI) is a U.S. based, late-stage biopharmaceutical company focused on the acquisition, development, and commercialization of innovative therapeutics addressing cancer and other unmet medical needs for the global market with a focus on commercialization in China.
CASI recently announced that it has entered into agreements with certain institutional and accredited investors, including existing shareholders, to purchase approximately $23.8 million of securities in a direct offering. CASI expects to receive net proceeds of $23.3 million, which will be deployed to support business development activities and drive the Company’s continued growth.
Before this, in September 2017, the company provided an update on its pipeline and, with it also provided upcoming key catalysts. The company is having three promising assets; namely – EVOMELA, MARQIBO, and ZEVALIN.
China’s Food and Drug Administration (CFDA) has already granted a priority review for CASI’s import drug registration clinical trial application for EVOMELA (melphalan) for Injection, meaning we could see clinical trial application by the end of this year. If the Chinese authorities approve a clinical trial (which is highly likely, given the priority review designation), then there is a high chance that the company can move straight into a pivotal investigation and get a rapid start on its path towards commercialization in the region.
Melphalan is extensively used worldwide in the treatment of patients with multiple myeloma. However, no formulation of melphalan is currently available in China. CFDA’s accelerated pathway is enabling this critical medicine to reach patients in China; if the company can get it approved it would be a significant revenue related trigger for the company.
Apart from EVOMELA, CASI’s MARQIBO import drug clinical trial application (CTA) is in process. The Company anticipates that the CFDA will complete its review of the CTA in the next four to six months, and expects to initiate the confirmatory trial within six months after CTA approval. The confirmatory trial is required as part of the registration process for the import drug registration.
The CFDA filing and review of CASI’s ZEVALIN import drug clinical trial application (CTA) is also in process. The ZEVALIN antibody kit and the radioactive Yttrium-90 component of the clinical trial application require separate submissions to the CFDA, which the first part is currently under review and the latter part is in the submission process. The Company expects to initiate the confirmatory trial within six months after the CFDA’s approval of both the ZEVALIN kit and the Yttrium-90 submissions.
Therefore, the company is having near-term financial flexibility, along with three promising assets, each of which is likely to move into a near-term trial in China and all of which are focused on markets with significant revenue and offtake/volume potential.
On the other side, this Chinese focus and dependency expose the company’s business risk profile to an added country specific risk as well, but for the investors who are willing to take this exposure, there’s plenty of opportunities to be had in this country. The company currently has an average rating of “Buy” and an average near-term price target of $3.00.
About the Company: CASI is a biopharmaceutical company focused on the acquisition, development, and commercialization of innovative therapeutics addressing CANCER and other unmet medical needs for the global market, with a focus on China and the U.S. CASI is a NASDAQ-listed company, headquartered in Rockville, Maryland with a wholly owned subsidiary and R&D operations in Beijing, China.
Product pipelines and present stage:
EVOMELA® (melphalan) for injection, is already marketed in the U.S. by CASI’ partner, is intended to be used as a conditioning treatment before autologous stem cell transplant for patients with multiple myeloma. Import drug registration is currently pending with CFDA with priority review granted.
MARQIBO®, already marketed in the U.S. by CASI’ partner, is indicated for the treatment of advanced Philadelphia chromosome-negative (Ph-) acute lymphoblastic leukemia (ALL). Import drug registration is currently pending with CFDA.
ZEVALIN®, also already marketed in the U.S. by CASI’ partner, is indicated for patients with relapsed or refractory, low-grade or follicular B-cell non-Hodgkin’s lymphoma (NHL).
ENMD-2076, is the company’ proprietary orally-active, Aurora A/angiogenic kinase inhibitor with a unique kinase selectivity profile and multiple mechanisms of action. ENMD-2076 has been shown to inhibit a distinct profile of angiogenic tyrosine kinase targets in addition to the Aurora A kinase and is ongoing in one Phase 2 clinical study.
CASI-001 and CASI-002 are CASI’ proprietary preclinical candidates in immuno-oncology
Second quarter financial results:
- CASI reported a net loss for the second quarter of 2017 of ($2.4 million), or ($0.04) per share. This compares to a net loss of ($3.3 million), or ($0.08) per share, for the same period last year.
- As of June 30, 2017, CASI had cash and cash equivalents of approximately $23.4 million.
- CASI is expected to release Q3 financial data on or about November 13, 2017.
Management’s guidance for the near to medium term: With a strong cash position, for the balance of 2017, the company will continue to advance MARQIBO®, ZEVALIN® and EVOMELA® closer towards marketing approval in China, evaluate its maturing clinical data and determine the next steps for ENMD-2076, while at the same time continue business development activities to further expand its pipeline.
Key risk factors and potential stock drivers:
- The favorable outcome of the upcoming catalyst. It seems investors can hope for positive news flows driving the share prices on a rapid growth trajectory in the coming weeks and months.
- Given upcoming trials, the company might need incremental funding over the medium term. Therefore, timely financial closure would remain a key business sensitivity factor for the company. Also, additional funding entails dilution risk for the existing shareholders.
- Biotech space is a high-risk sector due to uncertainties associated with the novel drug development. Therefore, favorable outcome of the upcoming catalyst is necessary for the stock to retain its momentum. Any adversities related with the same could upset the stock performance significantly.
- On Monday, October 30th, 2017, CASI is trading at $2.07 (+2.48%) on volume of 1.24 million shares exchanging hands. Market capitalization is $139.02 million. The current RSI is 46.98
- In the past 52 weeks, shares of CASI have traded as low as $0.97 and as high as $4.84
- At $2.07, shares of CASI are trading above its 50-day moving average (MA) at $1.72 and above its 200-day MA at $1.31
- The present support and resistance levels for the stock are at $1.95 & $2.08 respectively.
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