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Barclays Remains Positive On Cerulean Pharma Despite Failed Renal Cancer Trial

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Barclays Remains Positive On Cerulean Pharma Despite Failed Renal Cancer Trial

Barclays remains Overweight on Cerulean Pharma Inc (NASDAQ: 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.

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"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.

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Latest Ratings for CERU

DateFirmActionFromTo
Aug 2016BarclaysMaintainsOverweight
Aug 2016WedbushDowngradesOutperformNeutral
Aug 2016Leerink SwannDowngradesOutperformMarket Perform

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