Cellectar Biosciences (CLRB)
Using its patented phospholipid drug conjugates (PDCs) delivery platform to specifically target cancer cells, Cellectar Biosciences wants to improve the lives of patients battling the deadly disease. Should its CLR-131 candidate ultimately gain approval, some members of the Street believe it would make a great buyout target.
Writing for Oppenheimer, 5-star analyst Kevin DeGeeter tells clients that several factors are driving his bullish thesis. First and foremost, CLR-131 could get the FDA’s stamp of approval by the end of 2022 for lymphoplasmacytic lymphoma (LPL). To back up this prediction, the analyst stated, “There are no approved therapies for r/r LPL. Based on 100% response rate in four patients, including one CR, we expect management to advance CLR-131 into an abbreviated registration study by the end of 2020.”
On top of this, DeGeeter cites the therapy’s differentiated AE profile and competitive objective response rate (ORR) as suggesting that material off-label use could be a possibility. “While the market is highly competitive with potential for BCMA compounds to change SOC in early lines of therapy, clinical outcomes for triple refractory patients that account for about 15% of all cases remain poor with response rates of ~30% and PFS of four months,” he explained.
To this end, assuming a 60%/40% revenue split for the LPL and multiple myeloma markets, CLR-131 could generate peak sales of $290 million. If that wasn’t enough, development in rare pediatric cancers, including the potential for a priority review voucher, could drive even more upside.
Speaking to the possibility of M&A, DeGeeter commented, “We view M&A following CLR-131's potential FDA approval as a likely outcome. Recent consolidation in the radiopharmaceutical market includes acquisitions of Advanced Accelerator Applications for $3.9 billion and of Endocyte for $2.1 billion (both in 2018). Given complex supply chains for radiopharmaceuticals, larger companies enjoy favorable economies of scale on distribution and cost of goods, in our view.”
To this end, DeGeeter rates CLRB an Outperform (i.e. Buy) rating, along with a $5 price target. This figure implies shares could soar 283% in the next year. (To watch DeGeeter’s track record, click here)
The rest of the Street agrees. Only Buy ratings, 3, in fact, have been issued in the last three months, which add up to a Strong Buy analyst consensus. At $3.67, the average price target puts the upside potential at 181%. (See CLRB stock analysis on TipRanks)