BST Trade Alert: September 3, 2013

| September 3, 2013

Latest Alert

September 3, 2013


Buy Cyclacel Pharmaceuticals (NASDAQ: CYCC) up to $3.40 per share.

About the Company:

Cyclacel is a fascinating company with big upside potential.

This tiny biotech is pioneering orally available, small-molecule drugs that target the various phases of cell cycle control.  It’s primary disease targets are two forms of cancer, acute myeloid leukemia (AML) and myelodysplastic syndromes (MDS).

The company believes that the cell cycle – the process by which cells progress and divide – lies at the heart of cancer.

In normal cells, the cell cycle is controlled by a complex series of pathways by which a cell grows, replicates its DNA, and divides.  In cancer, as a result of genetic mutations, this regulatory process malfunctions, resulting in uncontrolled cell proliferation.

Based on this research, Cyclacel has generated two anticancer drugs that act on the cell cycle. 

What I like about these drugs is that they have characteristics which set them apart from other anticancer drugs.  Not only can they be taken orally, but they also interact with unique target profiles and mechanisms.

And best of all, they have potential to treat multiple cancer indications.

In a moment, we’ll take a close look at Cyclacel’s leading drug candidate.  But first, a word about the company’s financial condition.

Although Cyclacel is a small, development-stage biotech, it’s in solid financial shape. 

At the end of June, the company had $33.7 million in cash.  With a cash burn rate of $3.8 million a quarter, Cyclacel has enough cash to fund its operations for the next two years.  That’s more than enough time for our trade to play out.

Let’s now take that closer look at the company’s leading drug candidate.

About the Drug:

The most advanced drug candidate in Cyclacel’s development pipeline is sapacitabine. This amazing drug has potential to treat both blood cancers and solid tumors.

Here’s how it works in a nutshell. 

Sapacitabine interferes with DNA synthesis by introducing single-strand DNA breaks. These breaks in turn cause arrest of the cell division cycle and lead to the development of double-strand DNA breaks.  If left unrepaired, these double-strand DNA breaks then bring about the death of the cell.

Cyclacel has conducted extensive studies of sapacitabine over the past six years. Over 650 patients have received the drug in clinical studies in patients with AML, MDS, cutaneous T cell lymphoma (CTCL), and non-small cell lung cancer (NSCLC), hematological malignancies, and solid tumors.

And so far, the drug has shown promise in clinical testing.

The company’s most advanced study is a phase 3 pivotal trial called SEAMLESS.  The trial’s evaluating sapacitabine as a front-line treatment in patients aged 70 years or older with newly diagnosed AML.

In December 2012, Cyclacel reported promising data from the Pilot Study and Lead-In phase of the SEAMLESS trial.

Median overall survival for the trial’s 46 patients was 8.5 months.  That compares with a median survival rate of just 4.6 months for intensive chemotherapy.

Final results from the SEAMLESS phase 3 trial are expected in the fourth quarter of 2014.

Cyclacel is also currently evaluating sapacitabine in a phase 2 trial as a potential treatment for patients aged 60 and above with MDS.  And so far so good.

The most recent data (reported in April 2013) showed median overall survival of approximately 9 months.  That’s nearly double the median survival of elderly patients with MDS who have failed frontline therapies (4.3 to 5.6 months).

The company plans to provide an update on its pivotal development strategy for this indication by mid-2014.

No question about it, Cyclacel has important catalysts on the horizon.  We think it’s likely the stock will trend higher going into these events.

About the Market for This Drug:

Acute Myeloid Leukemia (AML)

AML is a cancer of the blood cells that progresses rapidly.  If the disease goes untreated, it could be fatal for the patient in just a few months.

The disease generally afflicts older people and is uncommon before the age of 40.  The average age of an AML patient is about 67 years.

There are more than 12,300 new cases of AML each year.  And about half of these are elderly people aged 70 years or older

Nearly 9,000 deaths are caused by AML each year in the US.

The current standard of care is cytarabine-based chemotherapy, which can often achieve remission.  However, the majority of patients relapse, and the survival rates are dismal.

According to the University of Texas MD Anderson Cancer Center’s historical experience, about 45% of AML patients aged 70 or above achieved complete remission.  However, median overall survival was only 4.6 months and patients experienced a 4-week death rate of 26% and an 8-week death rate of 36%.

Clearly, there is a need for more effective treatments for this deadly disease.

The global market for AML drugs is large and growing fast.  A new report from GlobalData projects this market will expand from $151 million in 2012 to $431 million by 2017.

That’s a compound annual growth rate of 23.3%.

There’s no question that sapacitabine represents a major growth opportunity for Cyclacel in the fast growing AML treatment market.

Myelodysplastic Syndromes (MDS) 

MDS is a family of clonal myeloid neoplasms, or malignancies of the blood, caused by the failure of blood cells in the bone marrow to develop into mature cells.  Patients with MDS typically suffer from bone marrow failure and cytopenias, or reduced counts of platelets, red, and white blood cells.

The exact incidence and prevalence of MDS are unknown because it can go undiagnosed.

Some estimates place MDS incidence at 15,000 to 20,000 new cases each year in the US.  And some authors put the incidence rate much higher at 30,000 to 46,000 new cases annually.

Literature evidence suggests that there is a rising incidence of MDS as the age of the population increases.   The majority of patients are aged 60 years and older.

There is currently only one curative treatment for MDS… allogeneic hematopoietic stem cell transplant.  Unfortunately, 75% of patients are not eligible for this treatment due to poor health and age.

Most MDS patients are being treated with one or more of the three FDA approved drugs for the disease.  According to GlobalData, the MDS drug market was valued at $652 million in 2010 and is expected to expand to $1.5 billion by 2017.

Clearly, Cyclacel has another huge opportunity with sapacitabine as a potential treatment for MDS.

About the Potential Catalyst: 

Cyclacel plans to provide an update regarding its pivotal development strategy for sapacitabine as a treatment for MDS in mid-2014.

Final results of the Phase 3 trial of Sapacitabine in AML are expected in the fourth quarter of 2014.

About the Shares:

Despite the important catalysts on tap next year, CYCC has been down in the dumps of late.  After briefly trading over $8 in December 2012, the stock has declined to the $3.00 per share area in 2013.

The last time CYCC traded at this level was in August 2012… just before the stock made its run up to the 52-week high of $8.18 in December.

In other words, the stock is trading at low end of its two-year trading range.  Given the upcoming catalysts, we think it’s just a matter of time before investors drive the stock back up to the high end of this range.

Take advantage of the short-term weakness and grab your shares of CYCC as soon as possible.  Make sure you’re positioned in this stock before the expected uptrend begins.

Key Facts:


Company: Cyclacel Pharmaceuticals
Ticker: CYCC
Recent Price: $3.07
Market Cap: $54 million
Avg. Daily Volume: 223,427 shares





Category: BST Trade Alert

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