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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