HCW ups Cesca Therapeutics PT to $6.50 from $1

H.C. Wainwright raised its price target for Cesca Therapeutics (NASDAQ:KOOL) to $6.50 from $1 after the company’s second quarter revenue beat consensus. The stock closed at $3 on Aug. 13.

Cesca develops and markets integrated cellular therapies and delivery systems that advance the safe and effective practice of regenerative medicine.

Analyst Swayampakula Ramakanth writes that the higher-than-expected revenue resulted primarily from strong performance in the company’s AXP product segment, including a large order from a major Chinese customer.

The company also expanded its gross margin to 45% in the quarter, a significant increase from 18% in the second quarter of 2018. According to management, the jump resulted partly from cost cutting and restructuring moves in late 2018 and early 2019 that resulted in lower overhead.

On the other hand, while the company has been steadily increasing the customer base for its new CAR-TXpress system, which reached 20 institutions in the second quarter, “we note that adoption of this innovative technology has been slower than we initially anticipated,” Mr. Ramakanth said.

Despite the slower ramp up, “we continue to believe that CAR-TXpress has great potential in accelerating the preparation of T-cell products and could become a major value driver in the future,” he added.


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