In a Nov. 1 research note from H.C. Wainwright & Co., analyst Ram Selvaraju reported that Stemline Therapeutics Inc. (STML:NASDAQ) "announced positive topline data from [its] pivotal Phase 2 trial of SL-401 in blastic plasmacytoid dendritic cell neoplasm (BPDCN), which included results from stage 1 (lead-in, dose escalation), stage 2 (expansion) and stage 3 (pivotal, confirmatory)." BPDCN is an ultra-rare orphan indication for which no current treatment exists.
In view of the favorable results, H.C. Wainwright increased the "probability of success for SL-401 to 90% from 85%, and our estimated market value of the firm has increased to $975M from $857M," Selvaraju noted. "Therefore, we reiterate our Buy rating and are increasing our 12-month price target to $38 from $34 per share."
With regard to stage 3 of the trial, which consisted of 13 enrolled, first-line BPDCN patients, it "demonstrated a complete response rate of 54%," detailed Selvaraju. The overall response rate was 77%, with 46% of patients having "bridged to stem cell transplant following remission on SL-401." About 86% of complete responders remained relapse free at five to eight-plus months out.
With respect to all three stages combined, in which there were 45 BPDCN patients (32 first-line and 13 relapsed/refractory) enrolled, the complete response rate was 60%. The overall response rate was 82%, with 41% of first-line patients having transitioned to stem cell transplant following remission.
As for the safety profile of SL-401, Selvaraju wrote that it "has been consistent with prior observations and appears manageable."
The analyst concluded that the results "are within our expectations; from our perspective, they have sufficiently shown the efficacy of SL-401 in treating BPDCN to warrant a speedy approval." According to Stemline, it is "on track" to file a biologics license application (BLA) for approval of SL-401 in first-line BPDCN in Q4/17 or early Q1/18.
Subsequently, due to SL-401's breakthrough therapy designation and likely associated expedited review, this targeted therapy "could secure U.S. Food and Drug Administration approval in Q3/18, followed by a commercial launch in the U.S. in Q4/18," Selvaraju purported. In that quarter, Stemline could "start to recognize SL-401 revenue for the treatment of BPDCN."
In December, at the annual American Society of Hematology, the company is expected to detail the results from its BPDCN Phase 2 trial. It also will provide updates on its other studies of SL-401, individually or in combination, for indications such as acute myeloid leukemia and multiple myeloma.
H.C. Wainwright has a Buy rating and new $38 per share target price on Stemline, whose stock is currently trading at ~$13.30 per share.
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Disclosures from H.C. Wainwright & Co., Stemline Therapeutics Inc., Target Price Revision, Nov. 1, 2017
I, Raghuram Selvaraju, Ph.D. and Yi Chen, Ph.D. CFA, certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst’s household has a financial interest in the securities of Stemline Therapeutics, Inc. (including, without limitation, any option, right, warrant, future, long or short position).
As of September 30, 2017 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Stemline Therapeutics, Inc.
Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The Firm or its affiliates did receive compensation from Stemline Therapeutics, Inc. for investment banking services within twelve months before, and will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
H.C. Wainwright & Co., LLC managed or co-managed a public offering of securities for Stemline Therapeutics, Inc. during the past 12 months.The Firm does not make a market in Stemline Therapeutics, Inc. as of the date of this research report.