MacroCure Seems Far From A Cure: Credit Suisse Cuts To Neutral

After Wednesday’s venous leg ulcer (VLU) futility announcement, Credit Suisse analyst Matthew Keeler looked into Macrocure Ltd MCUR and saw, in the best case scenario, a two-and-a-half- to three-year delay in approval in the United States versus his prior 2018 assumption.

Consequently, the firm downgraded the stock’s rating from Outperform to Neutral, trimmed its price target from $15.00 to $5.00 and lowered its 2025 WW CureXcell estimates from $260 million to $100 million – this assumes 0.5 percent US CureXcell DFU penetration by 2025, down from a previous estimate of 1.8 percent.

According to the note, Macrocure still thinks CureXcell will need data from two pivotal trials for U.S. BLA approval. However, management said it “may consider filing with a second diabetic foot ulcer (DFU) trial (to the extent the DFU trial achieves its primary endpoint) rather than with a second VLU trial,” the experts continued. Assuming that the company needs six to 12 months to begin with the second DFU trial, and another two years since it starts enrolling patients until it collects the necessary data, approval would arrive in 2021.

Related Link: Macrocure Says Phase III Clinical Trial of CureXcell in Venous Leg Ulcers Not Expected to Meet Primary Endpoint Shares of Macrocure are up more than 49 percent on Friday trading. Image Credit: Public Domain

The experts then went on to look at other elements in play at Macrocure:

• The company has not seen the data of the futility analysis, and thus, has not shared comments on the reasons behind the negative results. The note assured, “DFU data are expected in October & the company hopes to be able to review the available VLU data & provide an update on that trial in October as well.”
• Management has said the company counts with enough cash to fund a second phase III DFU trial. This should provide some flexibility in relation to funding.