Citi Starts Calithera Biosciences At Sell On Cash Burn And Lack Of Near-Term Catalysts

Citi’s Robyn Karnauskas expressed concern regarding the lack of potential catalysts for Calithera Biosciences Inc CALA in the near term. Furthermore, the cash burn expected over the next 12–18 months is likewise cause for uncertainty.

Karnauskas initiated coverage of the company with a Sell rating and price target of $1.

Unimpressive Data

Although the company was targeting cancer metabolism through its pipeline candidates, the analyst believes it could take a long time before any significant data is released.

“While the human trial for CB-1158 was only recently initiated, the data seen with CB-839 have failed to impress investors thus far,” Karnauskas mentioned.

Related Link: Citi Launches Positive Coverage On Five Prime Therapeutics

The analyst expressed concern that the expected updates for the next 12 months could mostly be incremental to the current dataset and would not meaningfully impact the drug profile.

Key Risks

“In addition, both targeted indications metastatic triple negative breast (mTNBC) and metastatic renal cancer (mRCC) could become crowded in next 2–3 years making them moving targets,” Karnauskas stated.

The analyst also believes partnership could be a key risk, and at its current cash burn rate, Calithera would need to either raise cash or establish a partnership to continue with its programs some time in H1:2017.

At last check, Calithera was down 20.51 percent at $2.35.

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