Roth Capital Partners initiated coverage of Stemline Therapeutics (NASDAQ:STML) with a “buy” rating and $30 price target. The stock closed at $17.90 on June 11.
“We expect Stemline to sail smoothly through a biologics license application and then through M&A, thanks to strengths of its lead asset SL-401, a relevant tumor-associated target (CD123) and simple anti-tumor mechanism (toxin conjugate),” writes analyst Dr. Jotin Marango.
In addition, he cited SL-401’s good efficacy and front-runner advantage in a small, defined, and terminal indication, with no standard of care in front-line blastic plasmacytoid dendritic cell neoplasm (BPDCN), commanding orphan pricing; and label expansion strategy dictated by disease course maintenance in post-transplant BPDCN, and target biology AML and myeloproliferartive neoplasms.
“We believe that SL-401 is approvable as is in BPDCN front line,” Dr. Marango said.
“We acknowledge that the BPDCN clinical portfolio of SL-401 is atypical (one multiple-staged trial), and may throw off certain investors,” he added. “However, in our view, the company has completed all that regulators have required (including the third stage of the BPDCN trial), and believe that a step back or a new ask from regulators at this point would be unwarranted and unlikely.”
Dr. Marango said the rolling BLA filing started in April, with breakthrough therapy designation in hand, and “we expect approval in the fourth quarter of 2018 – first quarter of 2019.”
Post approval, he said SL-401 would become attractive to a buyer with an existing hematology/oncology portfolio, specialized sales and marketing operation, and, ideally, with a penchant for myeloid tumors.
