Ladenburg starts Cyclacel Pharma at buy; PT $6.25

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Ladenburg Thalmann launched coverage of Cyclacel Pharmaceuticals (NASDAQ:CYCC) with a “buy” rating and $6.25 price target. The stock closed at $1.43 on Sept. 6.

“We believe CYC065, the company’s CDK 2/9 inhibitor, has demonstrated clear signs of activity against the Mcl-1 pathway, which has long been viewed as an attractive target for treatment of hematologic malignancies,” writes analyst Kevin DeGeeter.

He said Phase 1 data has demonstrated that CYC065 provides prolonged suppression of Mcl-1 expression, following a single dose, and additional regulation of CDK2 may offer synergy based on exploratory preclinical findings.

“If CYC065 maintains an acceptable safety profile – a key challenge for first-generation CDK2/9 inhibitors – in our view, CYC065 will be an important option for combination therapy in second-line hematologic malignancy populations,” he added.

In terms of catalysts, Mr. DeGeeter views a mid-2019 presentation of top-line Phase 2 data for CYC065, in combination with venetoclax in patients with relapsed/refractory chronic lymphocytic leukemia (CLL), as the most significant milestone. 

“While Mcl-1 has been linked to disease activity in a range of malignancies, we view second-line CLL as an attractive path to market based on more homogenous disease biology than acute myeloid leukemia (AML); preclinical data suggesting potential synergy with venetoclax; and unmet need with median survival around two years,” he added.

Stephen Kilmer