This drug company develops treatments for cancerous and degenerative diseases in Greater China. The listing of the shares was just upgraded from the NASDAQ Capital Market to the NASDAQ Global Market, which should bring additional exposure for the company.
Cellular Biomedicine Group Inc. (CBMG)
from The Medical Technology Stock Letter
Cellular Biomedicine Group Inc.’s (CBMG) stock has been under considerable pressure of late after a short report surfaced on the Internet detailing ancient history from the previous company they merged with in order to go public. CBMG began trading on NASDAQ in June 2014. In the company’s short time since it has been public, it has amassed, in our view, both an impressive management team and an intriguing cancer pipeline.
While the technology is early, the company’s novel CAR-Ts cover a wide array of important oncology targets including CD19, CD20, CD30 and EGFR/HER1, with albeit early clinical data recently presented at the end of March. The company has also in-licensed a PDL-1 drug candidate making CBMG’s cancer pipeline one of the most impressive among the early-stage cancer companies with market caps below $500 million.
CBMG’s ultimate goal is to create Immune Oncology drugs that treat not just blood cancers with personalized medicine, but also address the much larger market opportunity of treating solid tumors with off the shelf drugs.
Before this latest bear raid, the stock had been on an incredible run, flying from single digits and reaching a high of 49 last month. While it is normal for stocks that move up very fast to back and fill, we believe the recent correction has been overdone. When stocks have a parabolic move, they often attract short sellers. In biotech, that usually results in someone dissecting a recent SEC filing and selectively disseminating the “risk” sections. In development-stage companies, there are many risks that usually include the typical caveats such as a) we have no revenues or approved products; b) we may need to raise additional capital; c) our products may or may not gain FDA approval, etc., etc.
Near-term catalysts include potential technology partnerships with either academic or corporate entities. Phase I/IIa data for the CAR-Ts that target CD-30 and EGFR/HER1 could be presented at the European Cancer Conference in late-September (abstracts have been submitted).
With an intriguing cancer pipeline and a management team that has shown an ability to deliver value, in our view, CBMG is a compelling investment opportunity at current levels. CBMG is a BUY under 40 with a TARGET PRICE of 55.
John McCamant, The Medical Technology Stock Letter, www.bioinvest.com, 510-843-1857, April 7, 2015