Barclays Remains Positive On Cerulean Pharma Despite Failed Renal Cancer Trial

Barclays remains Overweight on Cerulean Pharma Inc CERU, despite the failure of CRLX101 in renal cancer trial, as it thinks the rationale for PARP combination is not impacted.

"[T]he rationale of CRLX101's mechanism in renal cancer vs. that in combination with the high profile PARP inhibitor class is completely independent but also seems to have been written off in CERU's current valuation," analyst Jonathan Eckard wrote in a note.

Eckard highlighted that the chemo used in CRLX101 is a highly potent Topoisomerase 1 inhibitor, a class of drugs that has been extensively tested in combo with PARPs. The analyst noted that CRLX101 has proven to lessen class toxicities, making it possibly the only Topo1 inhibitor currently able to combine with PARPs offering some scarcity value.

Related Link: Gemphire Therapeutics Oral Cholesterol Drug Could Have $2.8 Billion Potential In U.S. Markets

"With initial PARP combination data and/or business development around CRLX101 over the next 6–12 months, we think completely writing off the stock is premature," Eckard continued.

However, the analyst cut his price target on the shares to $2 from $5 based on a shift in valuation to a sum-of-the-parts method and risk-adjusted view of the company's remaining assets.

At time of writing, shares of Cerulean Pharma remained flat on the day at $1.03.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!