Weisel issued a report after CC - rating Overweight
Adjusts price target from $55 to $52
Title of report is "4Q09 Earnings Highlight New Balance Sheet Leverage; Timelines to Pivotal Trial Initiations in Place"
1. Money: The company guided to a FY10 operating expense base of 21-23ml and YE cash of 29-31ml. This should sufficient fund operations into 2012 exclusive of any additional non dilutive milestone payments from Teva.
2. Timelines for HRPC and 011: 2nd line HRPC trial (300) should accrue patients in 2Q10. Patients in 1st line HRPC trial (800) will begin in 3Q10. Enrolment should be completed at low end of range of 12-24 months. Model is to make front and second line HRPC regulatory filings in mid to late 2012 with a commercial launch in 2013.
3. Timelines for NSCLC and 011: initiation of front line trials in phase III fixed for early 2011. The heterogeneous nature of NSCLC with respect to various cellular subtypes combined with the number of attractive potential options for front line therapy - Avastin, Alimta - will make decisions around trial design and patient inclusion extremely important.
4. 427: company hopes to present phase I data of 427 in solid tumors at June 4-8 ASCO. Promising signals have led to initiation of investigator sponsored phase I and II trials in bladder cancer (already enrolling) and HRPC (enrollment later this year). Phase II trial in HRPC could form basis for PHase III trial. The company expresses excitement about 427 in ovarian cancer and multiple myeloma patients.
Conclusion: Hard pressed to find better value than OGXI in all of oncology. Substantially undervalued. Interesting to compare to MDVN which have settled at market value of 400ml after Dimebon disappointment when that company is essentially built around a late stage HRPC asset. OGXI is not paying any phase III costs and "provides investors with a free call option on a front line label in the multi billion dollar front line NSCLC market." There is an over discount with the emerging proof of concept data from 427.
If you want a copy let me know.