Monday, March 7, 2016

Seeking Alpha: Aptose Needs To Get Moving

Certain risks are inherent to biotech; the fact that most clinical compounds fail in human testing being foremost among them. Small biotechs have additional challenges, including limited resources when it comes to driving site and trial enrollment and attending to other details. And then there are the "unforced errors" - mistakes and missteps that occur at companies of all sizes, but can hit smaller biotech companies much harder given their typical smaller cash balances and margins of error.

Aptose Biosciences (NASDAQ:APTO) hasn't done a lot since my last update on the company to inspire confidence. Slow progress with a key early-stage clinical study of APTO-253 can be forgiven as an inevitable part of the process, but the subsequent clinical hold due to mistakes that apparently tie back to prior management is not so easily forgiven.

I've cut my fair value estimate roughly in half, as I believe the breakdown in biotech valuations coupled with uncertainties and concerns about the clinical hold and trial progress with APTO-253 will make financing more expensive. I still believe there's a chance that APTO-253 proves to be a worthwhile drug, and the partnership with the Moffitt Cancer Center is interesting, but an already skittish biotech market is not going to be kind to a micro-cap biotech with one lead candidate in early-stage development and a trial that is not currently enrolling. I would note, though, that none of the issues affecting Aptose really speak to the quality or potential of the lead drug (APTO-253) and aggressive investors who can tolerate the volatility and risk shouldn't ignore the story solely for those other issues.

Read the full article here:
Aptose Needs To Get Moving

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