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Tuesday, October 20, 2020

Cerulean Pharma Inc (NASDAQ:CERU) Blasts Off on Strategic Options Talk

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Cerulean Pharma Inc (NASDAQ:CERU) is a nanotech biotech working toward cancer treatment. CERU stock has had a rough ride of late, but found a spark a few weeks ago and developed some momentum off the lows. That momentum has been supercharged in recent days following a statement out of senior management and the board that the company is reviewing “strategic options”, which is of course code for either an acquisition or asset sale.

According to the company’s press release, Cerulean has engaged investment bank, Aquilo Partners, L.P., as its financial advisor to assist in the strategic review process. That news has sent shares into flight, ripping 63% just in the past week. Moreover, the stock has witnessed a pop in interest, as transaction volume levels have recently pushed a bit less than 760% beyond what we have been seeing over the larger time frame.

Cerulean Pharma Inc (NASDAQ:CERU) bills itself as a clinical-stage company that develops nanotechnology-based therapeutics in the areas of oncology and other diseases in the United States.

The company’s lead product candidate is CRLX101, a tumor targeted nanoparticle-drug conjugate (NDC), which is in Phase 2 clinical development in patients with renal cell carcinoma; and in Phase 2 and Phase 1b clinical development in patients with ovarian cancer.

It is also developing CRLX301, a platform-generated NDC clinical candidate, which is in Phase 1/2a clinical trials. The company has a strategic collaboration with Novartis to develop nanoparticle-drug conjugates for various cancer tumor targets.

The company was formerly known as Tempo Pharmaceuticals, Inc. and changed its name to Cerulean Pharma Inc. in October 2008. Cerulean Pharma Inc. was incorporated in 2005 and is based in Waltham, Massachusetts.

According to company materials, “The Cerulean team is committed to improving treatment for people living with cancer. We apply our Dynamic Tumor Targeting™ Platform to create a portfolio of nanoparticle-drug conjugates (NDCs) designed to selectively attack tumor cells, reduce toxicity by sparing the body’s normal cells, and enable therapeutic combinations. Our first platform-generated NDC clinical candidate, CRLX101, is in clinical trials in combination with other cancer treatments, all of which aim to unlock the power of combination therapy. Our second platform-generated NDC clinical candidate, CRLX301, is in a Phase 1/2a clinical trial.”

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The intention of the strategic review is to evaluate potential alternatives such as the sale of the company, a merger, a business combination, a strategic investment into the company, or a sale, license or disposition of assets of the company. This process may not result in any transaction.

In its strategic review, the Board is considering, among other things, Cerulean’s clinical assets, NDC platform, and cash reserves. The company outlined these in the press release:

Clinical assets: Cerulean’s platform-generated NDC programs, CRLX101 and CRLX301. NDC Platform: Cerulean’s Dynamic Tumor Targeting Platform which creates NDCs that are designed to provide safer and more effective cancer treatments. Cash Reserves: As of September 30, 2016, the Company had $38.1 million in cash and cash equivalents.

Cerulean cautioned that the review may not result in any deal. Shares of CERU are languishing since its major beat-down suffered back in August of last year, when the stock dropped more than 50% in one day upon revealing that its lead drug, a treatment for patients with liver cancer, failed in a Phase 2 trial.

One day after announcing the study results, Cerulean said it was cutting its workforce from 55 employees to 23, a move it expected would save about $5 million a year. A spokeswoman for the company said Wednesday that it currently has 19 employees.

At this time, carrying a capital value in the market of $35.7M, CERU has a significant war chest ($38.1M) of cash on the books, which is balanced by about $8.2M in total current liabilities. The company is pre-revenue at this point. We will update the story again soon as further details emerge. For continuing coverage on shares of $CERU stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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