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Oppenheimer expects launch of CTI BioPharma’s rare blood cancer treatment pacritinib to be delayed until 2022

As a result, analyst Leah Rush Cann lowered her target price on the biotech stock to US$4 per share from US$6
Blood cancer
The Seattle, Washington biotech stock plunged 42.4% to US$2.30 Wednesday

An Oppenheimer analyst said Wednesday that she expected the launch of CTI BioPharma Corp’s (NASDAQ:CTIC) pacritinib, which holds great promise as a treatment for patients with advanced myelofibrosis, to be delayed until 2022.

“Owing to the financial impact of the delayed estimated launch of pacritinib, we are lowering our target price to US$4 per share from our prior US$6,” Oppenheimer analyst Leah Rush Cann wrote in a note to analysts.

According to the Mayo Clinic, myelofibrosis is a serious bone marrow disorder that disrupts the body's normal production of blood cells and causes a rare blood cancer.

The news sent the Seattle, Washington biotech stock reeling 42.4% to US$2.30.

“Our financial outlook for 2018-19 is basically unchanged. For 2020-24, our revenue forecast is being reduced by 55%, 88%, 86.2%, and 51.0%, respectively, to account for the delay for pacritinib,” wrote Oppenheimer analyst Leah Rush Cann in a note to analysts.  

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“The net effect is an increase in our estimated loss per share from US$0.75 to US$0.94 for 2020 and from US$0.12 to US$1.19 for 2021. We no longer estimate that CTI will be EPS-positive by 2024 and are lowering our EPS to loss per share forecasts,” she added.

Key Points

CTI BioPharma announced Wednesday that it recently conducted a Type B meeting with the US Food and Drug Administration (FDA) to discuss the regulatory pathway for pacritinib.

“CTI reported that based on FDA feedback, it now plans to conduct a randomized phase III study in patients with myelofibrosis,” wrote Cann.

“The dosing for the phase III study will be determined using the results of the PAC203 study. Management reiterated that PAC203 is expected to complete enrollment by the end of 2018, with full top-line data expected in the second quarter of 2019. The new phase III study is expected to open in 2019,” she added.

READ: CTI BioPharma reports failure of Phase 3 non-Hodgkins lymphoma trial

CTI Biopharma is currently evaluating pacritinib in two phase III development programs for the treatment of primary myelofibrosis and a phase II program for primary myelofibrosis previously treated with ruxolitinib.

Investment thesis

“Based on our expectation that CTI BioPharma will introduce its first product in the US in the next few years, we estimate that total revenue will grow to US$196.8mln in 2024,” wrote Cann.

“If we discount our estimated revenue for risk-of-failure and for investment returns, we arrive at a 12 to18 month target price of US$4,” she added.

Contact Uttara Choudhury at [email protected]

Follow her on Twitter: @UttaraProactive

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