Cytori Therapeutics Inc. (CYTX:NASDAQ) recently showed bioequivalence of late-stage ATI-0918, its generic liposomal formulation of doxorubicin, to Johnson & Johnson's Caelyx, which is a branded product in the European Union, Maxim's Jason Kolbert reported in a Nov. 16 research note. Cytori presented the supporting data at the annual meeting of the 2017 American Association of Pharmaceutical Scientists held Nov. 12 to 15.
The bioequivalence for Cytori's ATI-0918 is about 90% of doxorubicin, "which is very good," noted Kolbert. In comparison, generics must fall within 80–125% bioequivalence of the reference product, and the closer to 100%, the better. This confidence interval is characteristic of generics with which regulators are concerned.
About these findings, Kolbert said they "should be very attractive to potential partners." In fact, Maxim Group anticipates that Cytori will pursue a partnership to commercialize ATI-0918.
The biotech is expected to file in H2/18 for approval of this nanomedicine from the European Medicines Agency, and subsequently do the same for ATI-1123, its patented, nanoparticle-stabilized liposomal formulation of docetaxel. "These products both represent significant upside to the Cytori story, neither of which is, in our opinion, being reflected in the current 'distressed' value of the company," wrote Kolbert.
ATI-0918 and ATI-1123 are assets that Cytori gained when it acquired Azaya Therapeutics. "Both represent low-risk, high-reward specialty pharma products that, if monetized, could generate nondilutive capital for the company," Kolbert indicated.
In light of the transaction with Azaya, which closed in Q1/17, Kolbert estimates "a 15% market share and 35% royalty rate for the $300 million European liposomal doxorubicin market with the first year of commercial sales in 2019," he said. To be conservative, Kolbert excludes from his model on Cytori projected revenues from the United States or any other potential market.
Maxim Group has a Buy rating and a $5 per share 12-month target price on Cytori, whose stock is now trading at around $0.38 per share.
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Disclosures from Maxim Group, Cytori Therapeutics Inc., Company Update, Nov. 16, 2017
I, Jason Kolbert, attest that the views expressed in this research report accurately reflect my personal views about the subject security and issuer. Furthermore, 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.
I, Jason McCarthy, Ph.D., attest that the views expressed in this research report accurately reflect my personal views about the subject security and issuer. Furthermore, 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.
The research analyst(s) primarily responsible for the preparation of this research report have received compensation based upon various factors, including the firm’s total revenues, a portion of which is generated by investment banking activities.
Maxim Group makes a market in Cytori Therapeutics, Inc.
Maxim Group managed/co-managed/acted as placement agent for an offering of the securities for Cytori Therapeutics, Inc. in the past 12 months.
Maxim Group has received the non-objecting beneficial owners (NOBO) list from Cytori Therapeutics, Inc. which may have some value for the Firm's Wealth Management division.
Maxim Group received compensation for investment banking services from Cytori Therapeutics, Inc. in the past 12 months. Maxim Group expects to receive or intends to seek compensation for investment banking services from Cytori Therapeutics, Inc. in the next 3 months. An affiliate of Maxim Group beneficially owns warrants/shares in Cytori Therapeutics, Inc.