YM BioSciences (AMEX: YMI): Griffin Reiterates Buy Rating, Ups Price Target to $5.50
Posted by Mike Havrilla on Wed, Oct 28, 2009 @ 02:06 PM
On 10/28/09, Griffin Securities issued a research report, reiterating its buy rating on YM BioSciences (AMEX: YMI) (TSX: YM.TO) and increasing the 12-month price target to $5.50 per share. Below is a summary of the rationale behind the updated buy rating and new price target.
1.) YMI has 11 global Phase II / III trials ongoing for nimotuzumab (nimo), which is an EGFR-targeting monoclonal antibody with best-in-class potential in an established class of billion dollar drugs with only two other antibodies available that target EGFR, including Erbitux and Vectibix
2.) YMI has a strong development partner in Japan, Daiichi Sankyo (OTC: DSKYY.PK), that provides both validation for nimo's commercial potential and funding for clinical trials in Japan with YMI receiving a royalty on sales, milestone payments and the use of clinical data that is generated. Data is expected from Daiichi's Phase II trial of nimo with chemo / radiation as a first-line treatment for non-small-cell lung cancer (NSCLC) and data from Daiichi's Phase II trial of nimo in recurrent gastric cancer during 1H10.
3.) Data from a Phase II randomized trial in head and neck cancer for nimo demonstrates comparable efficacy to Erbitux in high-EGFR expressing cells without the numerous severe toxicities of Erbitux, such as severe rash.
4.) The Company's proposed all-stock acquisition of Cytopia Ltd. (ASX: CYT.AX) includes a promising clinical stage portfolio to YMI at a favorable valuation (would involve the issuance of approximately 7.2 million new shares of YMI stock). CYT997 is currently in a Phase II trial in glioblastoma multiforme (GBM) and a Phase II trial in multiple myeloma. Results are expected from the GBM Phase II study in mid-2010. In addition, the estimated impact on YMI's cash burn rate from this acquisition is minimal at $1 million in 2010 and $3 million in 2011 for the additional upside potential and pipeline expansion that is provided.
5.) YMI enjoys a solid balance sheet with approximately US$36 million in cash / equivalents as of mid-year, which provides ample resources to support further clinical development of the Company's key programs.
The full research report is available to view or download in PDF format from both BioMedReports.com and the ProActive News Room websites.
Disclosure: No positions