Cellectar Biosciences Inc (NASDAQ: CLRB)
Cellectar Biosciences is an oncology focused company based in Madison, Wisconsin. Since the beginning of the year, CLRB has been trading down significantly from its 52-week high of $18.00 per share, closing at $1.77 during Thursday’s trading session. However, investors appear to have liked what they heard during the earnings release call on 11/10/16, with the stock gapping higher on the open to $1.90.
Friday’s early morning trading also led to a break higher on the RSI, moving the indicator from a reading of 26 up through the 40 level, indicating a potential breakout to the upside. Although volume remains light as investors enter the holiday weekend, CLRB appears poised to move higher off of its most recent data release.
CLRB is an oncology company focused on developing therapeutic products to target a broad range of cancers with their proprietary Phospholipid Drug Conjugate Delivery Platform (PDC). The PDC platform works in combination with its Phospholipid Ether cancer-targeting vehicles, which enable the technology to deliver a diverse oncologic payload to cancer cells. With this targeted approach, PDC can deliver an increased payload of cancer fighting compounds to deliver greater therapeutic effect.
The PDC has been validated through peer-reviewed publications and has demonstrated proof of concept in a broad range of cancer treatment through their clinical research.
CLRB is focusing on unlocking the value in PDC through collaborations and partnerships that can advance their CLR-131 franchise by developing early stage chemotherapeutic conjugates and by expanding the PDC pipeline. CLRB has an extensive intellectual property portfolio and has remained focused on conservative management of their financial resources. PDC is providing proof of concept in both in-vitro and in-vivo delivery, demonstrating efficacy in treating a broad range of cancers. To date, CLRB has treated over 100 patients for over ten different cancer indications.
Proof Of Concept Data
During these trials, intended to demonstrate both therapeutic and proof of concept value, the PDC has delivered encouraging results. The small molecule PDC approach for cancer-targeting offers significant advances to treating the disease, inclusive of increasing a targeted therapeutic payload, the ability to overcome resistance to treatment, the ability to offer additional linking mechanisms, and the benefit of lower cost and less complex manufacturing processes.
Specific to CLRB’s CLR-131 study, the PDC radiotherapeutic overview demonstrated the platforms novel mechanism of action and produced early signs of efficacy during its maximum dosage phase I trial for myeloma. Additionally, there was considerable improvement between cohort one and cohort two, where the progression-free survival rate increased by 30%, with the average number of adverse effects decreasing. The results were strong enough for the company to progress toward a planned phase II clinical trial to advance the treatment of relapse/refractory multiple myeloma.
Immediate clinical development plans for CLR-131 include applying for Orphan designation, expanding focus toward niche markets and unmet medical need designations, and securing non-dilutive funding to expand the CLR-131 program.
In both August and September, CLRB received non-dilutive funding in the form of grants and contract awards totaling $14 million dollars. Two million dollars was awarded by the National Cancer Institute SBIR and an additional $12 million by the University of Wisconsin. These grants demonstrate the significance and relevance of the PDC platform and the potential of the CLR-131 program.
The $2 million dollar award contract from the NCI will support the phase I trial of CLR-131 for the treatment of hematologic malignancies, including multiple myeloma.
The $14 million dollar University of Wisconsin grant will advance the study of CLR-131 to treat head and neck cancers in a combination therapy using external beam radiation. The U of W SPORE grant provides significant validation of the potential of CLR-131 and the rigorous review and selection standards by U of W prior to selecting CLRB as a grant recipient pay testament to the potential value seen in Cellectar’s lead compound.
It’s important to note that CLR-131 has a well-tolerated and positive safety profile, exhibiting no cardiotoxicity, no neurotoxicity, and no gastro-intestinal toxicities.
Target Market For CLR-131
With continued success in the trials, CLRB will be focused on targeting an almost $9 billion dollar myeloma market. In addition, CLR-131 will be targeted toward treating unmet medical needs and hematologic cancers. Although the political rhetoric is to clamp down on the high cost of drug treatments, the potential benefits of CLR-131 may put it in a position to charge premium prices due to the nature of the compound and its therapeutic effect. Besides, once the elections are over, the expectation is that much of the political maneuvering for votes will be exhausted and the political soundbites about the high cost of medication will subside.
In getting compounds to market, CLRB will leverage off of its Pierre Fabre collaborations to conduct both in-vivo and in-vitro studies, complete additional proof of concept trials, utilize Pierre Fabre’s proprietary cytotoxins and take advantage of a co-library of PDCs.
In a boost of confidence for CLRB’s proprietary technology, Laurent Audoly, Head of R&D at Pierre Fabre Pharmaceuticals, stated, “We are convinced that Cellectar’s proprietary technology will provide our cytotoxic molecules with tissue specificity and enhanced safety which are typically lacking with untargeted agents.”
CLRB Financials, Capital Structure, And Q4 Initiatives
As of September 30, 2016, CLRB had 5.4 million shares outstanding and roughly 5 million shares of warrants and options available to investors, bringing a fully diluted share count of 10,395,959. The company had $5.6 million in cash on hand and has guided investors to the need for additional capital in 2017.
For the remainder of the year and into the start of 2017, CLRB anticipates the following milestones to occur:
- Initiate a phase I clinical trial for multiple myeloma,
- Continue its phase II trial for hematologic cancers, and
- Provide clinical updates for both its phase I trials as well as its Pierre Fabre collaborations.
Investing In Transition
No doubt that CLRB has been beaten down however, many in the small cap pharmaceutical sector have endured the same fate. The promising data from the CLR-131 trials, especially with the broad applications of the compound, provide investors with a good opportunity to invest in a transformational company at discount prices. The low O/S is a plus, although the likelihood for additional cash raises is not out of the question.
As is the case with most small biotech companies, those that appear in need of cash are often traded down to extremely low levels to take advantage of financial weakness. However, financial weakness can be overcome with strong clinical data, which is what CLRB has been reporting.
With the RSI finally breaking above 30, and with a market that may soon put the “risk-on” trade back into action, CLRB is a stock worthy of consideration. While investors have not give up on CLRB by any means, they do appear to be in a wait-and-see mode. With milestones anticipated in Q4 and 1H/2017, the stock has a good opportunity to move considerably higher.
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