Expect Stemline To Generate Acquisition Interest As SL-401 Approval Decision Nears

BPDCN is acute myeloid leukemia, which is a type of cancer of blood and bone marrow with excess immature WBC.

In a quick note. Wedbush delved on the company's announcement and offered its take on the timeline for approval and sales estimate. Additionally, the firm broached the possibility of the company being a takeover target.

Enrollment Details

Wedbush noted that the company reported enrollment of 13 first-line patients in the third cohort of a mid-stage study of SL-401, following up on the four to six patients enrolled in the third cohort during the first week of January. The firm termed the speed of enrollment as impressive, given that the disease is rare.

Key Milestones

• A clinical update from the first two cohorts will be presented at an undisclosed scientific conference mid-year (potentially ASCO, June 2–6, abstracts to be available by May 17).
• Top-line data from third cohort are expected in the second half of 2017.
• BLA filing for SL-401 in first-line BPDCN targeted for 2H17, contingent on results from the third cohort.

Expectations Concerning Approval

"We expect results that are in-line with historical performance to be sufficient to support approval," Wedbush said.

Potential

As SL-401 approval nears, Wedbush said it expects commercial infrastructure buildup, and potential acquisition interest. The firm expects a 2H18 launch date for SL-401 and forecasts U.S. peak sales of $200 million in BPDCN.

Explaining the inputs going into the estimate, Wesbush said, "Our estimate is based on a high 90 percent penetration (achievable given lack of alternative therapies) in the ~900 patients that are diagnosed with BPDCN in the US annually. We estimate a $120,000 reimbursed price per patient, in-line with other novel blood cancer drugs."

"Although we expect STML would be capable of building out commercial operations on its own, we also see the company as a good bolt-on acquisition for a bigger biopharma looking to build out their presence in the blood cancer treatment space," the firm added.

Wedbush reiterated its Outperform rating and $11 price target for the shares of Stemline Therapeutics. The firm clarified that the price target has been derived by applying a six-times multiple to the estimated sales of SL-401 for 2020, discounted back by 30 percent annually.

At the time of writing, shares of Stemline Therapeutics were down 4.75 percent at $8.52.

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